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Mega deals earn Kenyan law firms billions and top listing

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Legal fees typically range from 0.1 per cent to 0.5 per cent of deal value. FILE PHOTO | NMG
Legal fees typically range from 0.1 per cent to 0.5 per cent of deal value. FILE PHOTO | NMG 

Kenyan law firms earned millions of shillings from a busy deals pipeline in the past two years, latest industry reports show.

The deals came in the form of mergers and acquisitions, debt and capital raising as well as corporate restructuring.

Legal fees typically range from 0.1 per cent to 0.5 per cent of deal value, according to an earlier Business Daily research based on regulatory filings.  

London-based consultancy Chambers & Partners says Nairobi-based commercial law firm Anjarwalla & Khanna ranked top among the hotshot firms for its handling of some of the largest deals, including UK based fund CDC Group’s Sh14 billion investment in ARM Cement #ticker:ARM.

The 2016 deal gave CDC a 42 per cent stake in the Kenyan cement firm.

Anjarwalla & Khanna also acted for New York-based equity fund Kuramo Capital on its $40 million (Sh4 billion) investment in TransCentury #ticker:TCL through the acquisition of 24.99 per cent in the investment firm.

Bowmans (Coulson Harney) acted for global paint manufacturer Kansai Plascon during its multi-jurisdictional acquisition of Sadolin Paints valued at over Sh10 billion giving it a place of pride in the yearly listing of law firms.

The company also handled  Kenya Airways’ #ticker:KQ $2.2 billion (Sh222.9 billion) debt and equity restructuring, keeping its deals pipeline fertile.

Kaplan & Stratton, another Nairobi law firm, also made it to the coveted Chambers list for its 2016 role in South African firm Pioneer Food Group’s acquisition of a 49 per cent stake in the East African business of UK breakfast cereal group Weetabix.

The law firm also helped KenolKobil #ticker:KENO reorganise its operation – a move that allowed the firm to acquire assets previously owned by its subsidiary Kobil Petroleum.

Hamilton Harrison & Mathews acted for Africa Logistics Properties on a $60 million (Sh6 billion) equity capital raise that earned it recognition in the listing of top law firms.

Nairobi-based Iseme, Kamau & Maema Advocates kept its presence on the list for its role in chaperoning the International Finance Corporation’s (IFC) $35 million (Sh3.5 billion) investment in Britam Holdings #ticker:BRIT.

The firm also acted for KCB Group #ticker:KCB on a proposed Sh10 billion rights issue that was, however, indefinitely postponed.

Also in the list are Daly & Inamdar, the law firm that acted for Sadolin Paints on the multi-billion shilling sale of the company to Kansai Plascon at a price of more than $100 million (Sh10.1 billion).

Mboya Wangong’u & Waiyaki Advocates advised ABSA Barclays on the establishment of Kenya’s first ETF, and the secondary listing of gold bullion debentures on the NSE.

The law firm also acted for Fusion Capital on the $80 million (Sh8.1 billion) establishment and listing of a real estate development and construction investment trust.

MMAN Advocates provided competition advice to petroleum distribution company Buckeye Partners in relation to its acquisition of a 50 per cent stake in VIP Terminal Holding, for a sum in excess of $1 billion (Sh101 billion).

The firm also advised TransCentury, as a shareholder in Development Bank of Kenya, on the latter’s $3.2 million (Sh324.2 million) rights issuance and private placement.

Walker Kontos acted for KenGen on a rights issuance and the subsequent subscription of untaken shares. It also represented Fidelity Commercial Bank in the acquisition of its entire share capital by Mauritian lender SBM Africa Holdings.

Kenya has continued to cement its reputation as a hotspot for private equity (PE) firms in Africa with global dealmakers trooping to Nairobi to seal key deals, attracted by expected returns and an improved business environment.

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Top law firm eyes move into Sheffield city centre

One of Sheffield’s biggest law firms is on the hunt for a new home – sparking frenzied speculation in the property sector.

CMS, which employs 250 on South Quay Drive beside Park Square Roundabout, has hired agents to come up with suggestions for a new site.

CMS is eyeing a new site in Sheffield city centre.

CMS is eyeing a new site in Sheffield city centre.

The Star understands it wants more space, to be more central and to be more attractive to potential employees. The firm’s lease has two years left to run.

A spokeswoman said: “We can confirm our lease expires in 2020 and we are in the very early stages of looking so we are not able to provide any further detail at this stage.”

Due to a shortage of space in the city, it is likely to have to move into a new building. Three projects are already in the mix, although they are still on the drawing board.

It is understood agents acting for CMS have contacted Sheffield City Council about possibly having an office block in the next phase of the Retail Quarter, now called Heart of the City 2, next to the under-construction HSBC offices on Pinstone Street.

Just over the road, also on Pinstone Street, developer CTP has plans for 4 St Paul’s after building blocks 1, 2 and 3, a hotel and a residential tower, over the last decade.

And Sheffield United co-owner Kevin McCabe’s property company Scarborough Group is about to start ‘Vidrio’ its fourth building in the Digital Campus on Sheaf Street, which includes the Electric Works, Ventana House and Acero, which was completed last year.

Other sites could be considered, or there is a slim chance CMS could stay put.

But although its current base overlooks attractive heritage site Victoria Quays, it is some distance from the city centre and particularly difficult to get to by car.

The firm, under previous names, has had a presence in Sheffield since 1990. Today it has 16 partners and 141 lawyers in the city.

The relocation plan is seen as a sign of CMS’ commitment to Sheffield and a boost to the professional services sector.

Late last year accountants PwC announced it was closing its Sheffield office, just three years after moving into 1 St Paul’s. Staff will work from Leeds, or home.

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Cities say big-donor billboard firms push sneaky bill to allow bigger, lighted displays without local OK

Cities say the outdoor billboard industry — a big donor to Utah legislators and other politicians — is pushing a bill to win powers that courts recently ruled it lacks, including authority to switch out many signs for bigger, lighted or digital displays without local approval.

The billboard industry and its legislative allies downplay such arguments as mostly misunderstandings and promise to try to resolve them.

As a backdrop to the controversy, the industry is a top donor to lawmakers. In the election year of 2016, Reagan Outdoor Advertising, for example, gave a combined $79,630 to 75 of Utah’s 104 legislators. That was the third-largest amount of any donor, and often went for in-kind use of billboards for campaigns.

The company also donated more than $173,000 to all politicians that year, and an additional $81,000 last year — mainly to candidates running in 2017 local municipal races.

Amounts included $1,700 to House Majority Whip Francis Gibson, sponsor of the current bill. Disclosures show that Reagan gave him another $1,000 on Jan. 19 this year, three days before the legislative session began. Lawmakers are banned from accepting donations during the general session.

Gibson, R-Mapleton, and Reagan’s lobbyist, Nate Sechrest, jointly explained the new billboard bill, HB361, to the House Transportation Committee last week in a hearing, where opposition from the Utah League of Cities and Towns became public.

Trent Nelson | The Salt Lake Tribune Rep. Francis D. Gibson, R-Mapleton, as the Utah State Legislature meets in Salt Lake City, Tuesday Jan. 24, 2017.
Trent Nelson | The Salt Lake Tribune Rep. Francis D. Gibson, R-Mapleton, as the Utah State Legislature meets in Salt Lake City, Tuesday Jan. 24, 2017.

Gibson said the measure seeks to better define a method of putting a value to signs that are essentially condemned by cities. Under current law, he said firms wishing to relocate signs may do so anywhere that is mutually agreeable with a city within space limits, or the city is considered to have condemned it and must pay for it.

Arguments are a bit complicated, but his bill proposes to use eminent domain laws to guide that process. Sechrest testified, “It is a clarification of what we thought was the practice before the Supreme Court ruled otherwise.”

But the Utah Supreme ruled last year in Outfront Media v. Salt Lake City that a separate law, the Billboard Compensation Statute, guides the process. The court said the only part of eminent domain laws that apply are how to value condemned signs.

That’s important because Outfront had alleged Salt Lake City illegally blocked relocation of a sign because then-Mayor Ralph Becker took the action, not the City Council. It argued eminent domain laws require the top legislative body in a city to make such decisions. But the court said such laws generally do not apply.

The new bill would ensure that eminent domain laws do rule, and could give elected city council members final say on billboard relocations instead of other city officials.

In 2015, a political action committee with ties to Reagan Outdoor Advertising put up billboards for all opponents of Becker — who had long fought the industry and what he said was the blight it caused along highways and entrances to his city. Becker lost that race to current Mayor Jackie Biskupski.

Layton City Attorney Gary Crane, testifying for the Utah League of Cities and Towns, complained that using the eminent domain process as proposed in the bill could take two years to condemn and value billboards when cites don’t agree to proposed relocations.

Worse, Lynn Pace, senior governmental affairs adviser to Salt Lake City, said, the bill says that if cities don’t agree to a value or relocation in a quick 90 days, billboard firms would then be “allowed to relocate the sign without further city approval.”

He added, “That would be as to location, setbacks, heights or building permits. There has to be some further city approval to make sure that a sign is safe, and to make sure it meets the requirement of the code — even if it is relocated.” In short, he said, it’s a tricky way to take control away from cities for the placement of signs.

| Courtesy Lynn Pace is the new senior adviser, Intergovernmental Affairs, for Salt Lake Lake City Mayor Jackie Biskupski.
| Courtesy Lynn Pace is the new senior adviser, Intergovernmental Affairs, for Salt Lake Lake City Mayor Jackie Biskupski.

Gibson, however, said, “90 days should be reasonable.” He said if a city essentially condemns a sign, “then it should move up your priority list of things to do” to agree to a relocation or compensation.

Crane said the bill makes other apparently small changes that are actually huge. He said a one-word change on one line “essentially opens up what we call lighting of billboards. Billboard companies often argue that modifying a billboard also includes the proposition that you can light them. … It has been a source of litigation before.”

But Secrest argued that wording “is really no different than the language as it exists currently as far as regarding lighting.” Gibson added, “Nowhere in this bill was I ever told this had to do with lighting billboards. Are we are reading something into it because we sense that’s going to be happening?”

Pace said other wording could also give billboard firms new powers.

“This bill, under the language drafted, would allow for virtually unilateral conversion of any billboard to a digital or electronic format, and that’s a concern to us,” he said.

“There is a provision in the law that says that if the sign is blocked — you can’t read it — you can either raise it or relocate it to another site. This bill would give them the right to relocate it and raise — both of those. That issue was litigated in court, and the court ruled you get to choose between the two, but you don’t get both,” Pace said. “We just want you to know this bill addresses much more than just process” of valuing condemned signs.

Despite concerns raised by cities, the committee endorsed the bill 8-0 and sent it to the full House — but members asked Gibson, the industry and the cities to try to resolve differences and bring an amended version to the House.

Seven of the eight committee members took donations from the billboard company during their most recent campaigns — ranging from $500 to Rep. Walt Brooks, R-St. George, to $1,400 for Reps. Karen Kwan, D-Murray, and Logan Wilde, R-Croydon.

Gibson said he is willing to discuss issues further.

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U.S. Agriculture Companies Say Tax Law Preference For Cooperative Will Result in Wasted Money

CHICAGO (Reuters) – U.S. agricultural merchants are scrambling to register themselves as cooperatives after a blunder in the country’s new tax law gave farmers a tax break for selling grains to co-ops rather than private firms.

Private crop handlers – which includes the “big four” merchants Archer Daniels Midland Co, Bunge Ltd, Cargill Inc [CARG.UL] and Louis Dreyfus [LOUDR.UL] – fear they will struggle to buy grain supplies when the next harvest season comes if the provision is not overturned.

Lawmakers have admitted they made a mistake by including the clause in last-minute changes to the bill.

The new code has pushed the private companies to spend thousands of dollars to form co-ops or find alternative ways to get their hands on billions of bushels of U.S. corn and soybeans. In Minnesota, private handler Minn-Kota Ag Products is among the companies establishing a co-op so farmers can supply grain to the company and still receive the tax benefit. The move, which involves legal filings and setting up a board, could cost up to $100,000, Chief Financial Officer Dale Beyer said.

“It’s wasted money,” he said. “It makes us inefficient but it’s what we have to do for this law.”

President Donald Trump signed into law in December the Republican tax overhaul that allows farmers a 20 percent deduction on payments for sales of crops to co-ops, but not for sales to private or investor-owned grains handlers.

The provision is the latest challenge for merchants such as Cargill and ADM. They are also facing a supply glut that is making it tough to turn a profit on their core business: buying, processing and selling corn, soybeans and wheat.

Cargill is planning for ways to remain competitive under the tax provision, spokeswoman April Nelson said, without providing details. As it stands, the rule “would create a proliferation of co-ops,” she said.

ADM is also working on options to offset the rule, after suffering a minor commercial impact from it, the chief executive said last week.

Some farmers and grain companies believe lawmakers will craft legislation to fix what they call the unfair advantage for cooperatives. Still, many say they cannot wait to make alternative plans.

FILE PHOTO: A Cargill logo is pictured on the Provimi Kliba and Protector animal nutrition factory in Lucens, Switzerland, September 22, 2016. REUTERS/Denis Balibouse/File Photo

In Minnesota, farmer Kirby Hettver said he will start committing grain he will harvest this autumn to a local co-op, instead of to Cargill, if the tax issue is not fixed by the time he starts planting crops in April.

“It’s just creating turmoil and this uncertainty is just driving everybody crazy,” said Bob Zelenka, executive director of the Minnesota Grain and Feed Association, a trade group that represents co-ops and private companies.

CROPS FLOW TO CO-OPS

The provision was introduced to compensate co-ops and their farmer owners when Congress eliminated a part of the tax code that had benefited them for more than a decade.

On Wednesday, Republican U.S. Senator Orrin Hatch said he and other senators were working toward “a solution to this issue that does not choose winners and losers.”

Since the provision was approved, Chicago Board of Trade corn futures have climbed about 5 percent and soybean futures have gained about 8 percent, prompting farmers to increase sales of crops they harvested last fall.

Citizens LLC, a privately held grain elevator in Michigan, has seen its share of those sales fall as farmers have booked more deals with co-ops because of the tax rule, said Angie Setzer, vice president of grain.

Citizens is working on a deal in which its customers would technically sell crops to the company through a local co-op, she said. The arrangement would allow the elevator’s customers to receive the tax benefit. However, Citizens would have to pay the co-op a fee for each bushel of grain under the deal.

“It is not an easy fix and it is not a clean one so I hope we do not have to do it,” Setzer said.

U.S. ethanol producer Green Plains Inc, which buys about 3 percent of the nation’s annual corn harvest, recently obtained approval to operate a co-op in Indiana, Minnesota and Colorado, CEO Todd Becker said. It is awaiting approval in other states.

Green Plains has not yet activated the co-op because Becker is holding out hope lawmakers will address the imbalance. However, the company could do so quickly if business is suffering or it appears there will not be a legislative solution soon, he said.

“We can’t be at such a significant disadvantage to the cooperative down the street,” Becker said.

Reporting by Tom Polansek and Mark Weinraub; Editing by Caroline Stauffer and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.

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Behind the minimum wage fight, a sweeping failure to enforce the law

As Democrats make raising the minimum wage a centerpiece of their 2018 campaigns, and Republicans call for states to handle the issue, both are missing an important problem: Wage laws are poorly enforced, with workers often unable to recover back pay even after the government rules in their favor.

That’s the conclusion of a nine-month investigation by POLITICO, which found that workers are so lightly protected that six states have no investigators to handle minimum-wage violations, while 26 additional states have fewer than 10 investigators. Given the widespread nature of wage theft and the dearth of resources to combat it, most cases go unreported. Thus, an estimated $15 billion in desperately needed income for workers with lowest wages goes instead into the pockets of shady bosses.

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But even those workers who are able to brave the system and win — to get states to order their bosses to pay them what they’re owed — confront a further barrier: Fully 41 percent of the wages that employers are ordered to pay back to their workers aren’t recovered, according to a POLITICO survey of 15 states.

That’s partly because, in addition to lacking resources, states lack the tools to go after the landscaping firms, restaurants, cleaning companies and other employers that shed one corporate skin for another, changing names while essentially continuing the same businesses — often to evade orders to pay back their workers.

This failure to enforce both the minimum hourly wage — $7.25 under federal law — and rules requiring higher pay for overtime distorts the economy, giving advantages to employers who break the law. It allows long-term patterns of abuse to take root in certain service industries, especially restaurants, landscaping and cleaning. Advocates for lowest-wage workers describe families facing eviction and experiencing hunger for lack of money that’s owed them. And, nationally, the failure to enforce wage laws exacerbates a level of income inequality that, by many measures, is higher than it’s been for the past century.

“Low-income workers are already in this fragile balance,” said Victor Narro of the UCLA Labor Center. “One paycheck of not being able to get the wages they’re owed can cause them to lose everything.”

Interviews with scores of state officials, legal-services advocates and labor specialists indicate that the failure to enforce minimum wages touches every corner of the country, but is especially acute in the six states that have no investigators probing wage violations at all.

All six states that have no minimum-wage investigators are in the South, and in a seventh, Florida, former Gov. Jeb Bush eliminated the state Department of Labor over a period of years in the early 2000s. In theory, its responsibilities were distributed among other state agencies, but in practice Florida failed to undertake a single enforcement action for more than four years. Georgia, Louisiana, Alabama, South Carolina, Tennessee and Mississippi all have labor agencies, but workers can’t file minimum wage or overtime claims with them; they must instead appeal to the U.S. Department of Labor, which takes cases only selectively, based in part on the number of employees involved and the extent of the wrongdoing.

“In Louisiana, it would have a substantial impact on the lives of working families to be able to call someone and say, ‘My employer hasn’t paid me in three weeks — what do I do?’ and to have someone who can go in and help you with that,’’ said Andrea Agee, staff attorney at the Workplace Justice Project in New Orleans.

The federal Department of Labor, Agee said, isn’t the answer for individual workers, because it only takes cases selectively, and because it, too, lacks resources and is slowed by bureaucracy. “If you’re someone in need of a check, reporting a wage claim to the DOL is not going to get you your rent in time,” she said.

The federal Department of Labor has 894 investigators — vastly more than any state agency. By historic measures, though, its investigative workforce isn’t particularly large. In 1948, when the United States had 23 million workers, the division had 1,000 investigators. Today, the U.S. has seven times as many workers, but slightly fewer federal wage-and-hour investigators than it had 70 years ago.

A Labor Department spokesman said, “The current number of wage-and-hour investigators is well within the average of the past several decades. Note that in fiscal year 2017, [the department] recovered $270 million in back wages — the second-highest amount ever recovered.”

Politicians who support higher-wage laws are often passionate about the need for higher pay, making the minimum wage one of the most hard-fought issues of recent years. But they give strikingly little attention to the enforcement of those laws, where they could push to add investigators and institute new laws to make it harder for employers to evade enforcement by changing their corporate identities.

Asked to comment on POLITICO’s findings, Ohio Sen. Sherrod Brown, who helps lead a group of 22 Senate Democrats who support a plan to gradually increase the federal minimum to $15 per hour, and who has pushed his own bill to provide up to $50 million in grants to employers, nonprofits, unions and others who can assist in the enforcement of wage and hour laws, expressed concern but quickly pivoted to the larger issue of raising the minimum wage.

“Wages are far too low to begin with, so when money is stolen right out of workers’ paychecks, we have to have effective tools in place to get that money back,” Brown said in a statement. “But wage theft is just one part of the problem that hard work simply doesn’t pay off the way it should. And that’s true for all workers — whether they punch a time clock, swipe a badge, make a salary or earns tips — they’re working too hard for too little.”

That’s little comfort for the workers who fight their way through government bureaucracies and hearings to get their back pay — only to discover that there’s no way for the government to collect.

How would you feel if I robbed you of [thousands of] dollars?” asked Alfonso de la Paz, a construction worker who, according to the state of Illinois, was stiffed on about $3,000 in back pay by a contractor who failed to respond to two notices from the state Department of Labor. “That’s what he owes me.”

***

Battles over the minimum wage are fought along ideological lines, with liberals insisting that higher minimums prevent exploitation and support families who otherwise might need government assistance. Conservatives argue that the labor market should dictate wages, and that states, with their widely varying costs of living, are better positioned than the federal government is to set minimums. The 2016 Republican platform proposed that minimum-wage issues should be handled at the state level, and President Donald Trump, who suggested on the campaign trail that the federal minimum “has to go up,” has largely avoided the issue.

The issue shows every sign of going to the voters this November. Many Democrats are already stressing the importance of a $15-per-hour “living wage” as a way to energize lower-income voters. Meanwhile, many states have moved to raise their own hourly minimums far above the federal level — with Washington, D.C., requiring $12.50, Washington State demanding $11.50 and California clocking in at $11. Many other states exceed the federal minimum. In addition, federal law continues to require that hourly workers receive time-and-a-half for work beyond 40 hours per week.

But advocates for low-income workers across the country say employers routinely violate these laws, with little fear of getting caught. And even in states with comparatively robust labor departments, enforcement is lax.

Wage theft is the rule, not the exception, for low-wage workers,” said Michael Hollander, a staff attorney at Community Legal Services of Philadelphia, using a term that covers all forms of cheating on wages, including violating minimum-wage laws and overtime rules. Pennsylvania has 31 investigators probing wage and hours violations.

Richard Blum, a staff attorney at the Legal Aid Society in New York, which has 114 wage-theft investigators, suggested that employers make a strategic decision to violate wage laws to gain a competitive advantage: “It is competitively smart to cheat and steal from your workers because the odds of getting caught are low and the odds of having to pay are low.”

In addition to the six states with no investigators and Florida, which had no enforcement for at least four years, POLITICO’s review found that other states, including Arkansas, Ohio and Hawaii have reduced the number of investigators in recent years. Of the states that have investigators for minimum wage, 26 have fewer than 10, according to surveys conducted between September and February. South Dakota has one, for example, and Indiana has one fulltime and one working part time. Meanwhile, two states — Kansas and Iowa — put a monetary ceiling on wage-theft cases they’ll pursue: As a matter of policy, these states decline to pursue enforcement actions if the amount involved is too high. In Kansas, the ceiling is $10,000; in Iowa, $5,000.

“These agencies are so underfunded,” said Tia Koonse, legal and policy research manager at the UCLA Labor Center, “that we rely on the honor system for employers to pay the minimum wage.”

Workers who are shortchanged on minimum wage or overtime pay have three options: They can hire a private attorney; they can file a complaint with the state labor agency, if it enforces wage claims; or they can file a complaint with the federal Labor Department’s Wage and Hour division.

The federal government does a better job than most states in recovering wages: Money changes hands after wage-theft judgments about 90 percent of the time. But that success rate is less impressive when one considers that the Labor Department cherry-picks the cases it takes on, with an eye for those that promise big payouts, and can’t enforce payment of state hourly minimum that exceeds the federal rate of $7.25. The federal Labor Department also has more power than many state agencies to impose and collect penalties, reducing employers’ incentives to fight back.

Even with those advantages, the federal Labor Department ends up returning, on average, $16 million annually to the Treasury Department because it’s unable to locate the workers who are owed the back pay. Typically that’s because the claim has taken so long to work its way through the system that the employee has moved and is unreachable. Low-wage workers tend to be more transient than higher-paid workers, and some are undocumented, which makes them reluctant to keep the government fully abreast of their moves.

That leaves state Labor Departments as the prime source of on-the-ground enforcement, but as watchdog agencies tasked with enforcing wage laws, their relationships with local businesses are often adversarial, and business groups often lobby state legislatures to cut their funding. The appetite to fund labor-related investigations shrank further during the past decade as the pro-business GOP acquired control of more state capitals.

In Virginia, where Republicans have controlled both houses in recent years, the Legislature didn’t fund its payment-of-wage program for an entire year starting in July 2012. Government officials working in that division were reassigned, and workers in Virginia had no state office through which to recover stolen wages. One year later, when the Legislature restored funding, the division had to be re-created, and the state had to hire new people.

“State labor agencies in the South that enforce wage laws are few and far between,” observes Meredith Stewart, a senior staff attorney at the Southern Poverty Law Center.

Arkansas is one of the few that does. As recently as 2014, it had 10 investigators dedicated to wage-theft complaints. But today, it has five, one of whom has had to take on administrative work. Meanwhile, a single attorney is left to handle the agency’s wage litigation; to analyze proposed legislation affecting her division; to review her division’s regulations; and to provide legal advice to enforcement staff, the attorney told POLITICO in an email.

Lindsay Moore is Arkansas’ labor standards manager and he oversees enforcement of wage and hour laws. Cuts to his division, he said, lengthened wait times for employees who file claims to as long as one year. Sometimes, Moore will advise complainants that they’d be better off hiring a private attorney or taking their cases to the federal Labor Department.

“We simply don’t have the manpower to work on this in an expedient fashion,” said Moore. Often, he said, by the time the labor standards division is ready to take up a case, the worker is “very frustrated with us” and tells Moore to forget about it.

Even states outside the South often lack the personnel necessary to process and enforce claims in a timely manner, though staffing levels vary widely. Idaho (with a population of 1.7 million) has five wage and hour investigators, of whom only one is tasked with making sure that companies actually pay whatever back wages the state says they owe. Missouri (6.1 million) has three. Wisconsin (5.8 million) is more protective of workers, with nine wage-and-hour investigators, all of whom collect back pay.

“When workers cannot collect, it sends the message that such claims are not worth pursuing, that scofflaw employers can profit illegally with impunity, and that the deck is stacked in favor of the relatively rich and powerful,” said Sally Dworak-Fisher, attorney at the Public Justice Center in Maryland, which has 11 investigators handling wage claims.

***

Labor agencies in large, worker-friendly states often boast in news releases about millions recovered in wage-theft enforcement actions. But these same agencies turn reticent when asked what percentage of those wages were successfully extracted from violators and handed over to the wronged workers. That’s because a high percentage of those wages never make it to the state, let alone workers.

POLITICO’s survey of 15 states with comparable data found that 41 percent of the money assessed against employers who violate wage laws was never recovered. POLITICO compared the total wages assessed to total wages recovered for the 15 states between 2007 and 2017. State figures included many forms of wage theft and enforcement actions depending on what the state reported, including minimum wage, overtime and unpaid wages and benefits. Not all of the states surveyed reported data for each year.

Collection rates varied widely from state to state. Montana recovered $7.9 million of $33.3 million in back pay assessed between 2007 and 2016, just 24 percent. Texas did better, recovering 54 percent of $70.5 million between 2010 and 2016. Indiana recovered $2.3 million of $3.1 million assessed between 2010 and October 2017. Missouri recovered $1.5 million of $2 million in back pay assessed since 2007.

Studies in states whose data wasn’t part of POLITICO’s survey suggest that they, too, had widely varying rates of recovery of wage-theft cases, though even the best rates still left more than a third of all money unrecovered.

New York recouped about 64 percent of back pay assessed, according to data collected for a 2015 report by the Urban Justice Center, the Legal Aid Society, and the National Center for Law and Economic Justice. Massachusetts recovered in full on 56.3 percent of citations for wage violations between January 2015 and August 2017.

In California, by contrast, only 17 percent of workers who won wage-theft judgments between 2008 and 2011 received their money, according to a 2013 study by the UCLA Labor Center and the nonprofit National Employment Law Project. Paola LaVerde, a spokesperson for the California Department of Industrial Relations told POLITICO in an email that the state enacted new “enforcement tools” in 2016, but “there has not been sufficient time to evaluate the impact of those tools.”

But by its mere willingness to evaluate its success or failure, California is ahead of many states that don’t bother to keep track of how much they recover compared to how much they assess. Of the states that had investigators, 15 had comparable statistics for assessment and recovery, four compiled their data in different forms, and 24 could not say what their rate of recovery was. Florida, which did not perform any enforcement action from late 2011 through early 2016, according to records obtained by the publication In These Times and reviewed by POLITICO, did not respond to requests for updated information. And neither Jeb Bush, who as governor eliminated the state Labor Department, nor his spokesperson answered emailed requests for comment.

The recovery percentages from all states pale in comparison to the federal Labor Department’s claim that 90 percent of its judgments against employers end with the worker collecting back pay. But some questions have been raised about whether the federal Labor Department’s collection rate is really as high as it claims. In 2009, the Government Accountability Office said that the Bush administration’s Wage and Hour division “instructed many offices not to record unsuccessful conciliations, making [the division seem] better at resolving conciliations than it actually is.” GAO staffers posed as employees struggling to collect back pay and found some wage-and-hour inspectors recorded that they received it when they didn’t.

When the Labor Department determines that an employer owes an employee back pay, the agency can require that the employer pay the employee directly, or it can collect the money from the employer and pay the worker itself. A 2015 report from the Office of the Inspector General found that when President Barack Obama’s Wage and Hour Division followed this second route, it “did not make reasonable efforts to locate employees” in about 71 percent of cases, according to a random sample.

David Weil, who headed the Wage and Hour department under Obama, said that rebuke has to be viewed in context: Fully 76 percent of back wages are paid directly to workers by their employers, he said, and the amount returned to Treasury represents only 5 percent of the total owed. Weil conceded, however, that Wage and Hour must follow up more aggressively on its wage-and-hour judgments and that it needs to find better ways to locate employees to whom back pay is owed.

In January 2015, he said, the Labor Department created an online application in which workers can enter their names and those of their employers to find out if they’re owed back pay.

***

Even when states and the federal government are able to collect on back pay, the total represents only a fraction of the billions lost each year to wage theft. The Economic Policy Institute, a left-leaning think tank, estimated that annual wage thefts top $15 billion; they extrapolated that figure from a study of the 10 most populous states, accounting for more than half the country’s population. The vast majority of those dollars are never returned to workers, because employers have many tactics to avoid enforcement, including simply closing up shop.

Many of the service-industry companies that violate wage-and-hour laws have little in the way of brand identity or fixed costs. Their owners can therefore dissolve the business with comparative ease, transferring all assets to a new business entity that operates under a different name. Once the transfer is complete, there’s usually little a state labor agency can do to punish the owner, because on paper the offending company no longer exists.

The problem can be exacerbated by the long delays in processing claims. Twelve years ago, the New York state Labor Department ruled that a limousine company called Altour Service owed 25 drivers more than $250,000 in back pay.

Altour Service allegedly charged all its customers a 20 percent gratuity fee and then didn’t share that money with its drivers. In 2005, the New York Labor Department ordered the firm to give the drivers nearly $260,000 in back pay. Altour Service appealed that decision to the state Industrial Board of Appeals, which in 2012 upheld the state Labor Department’s decision. Altour then appealed again, this time to the New York state Supreme Court appellate division. In 2015, a full 10 years after the initial ruling, the court once again upheld the state Labor Department’s decision.

Even after the appellate division upheld the drivers’ claim, several told POLITICO that no money changed hands. That was because the company, Altour Service, no longer existed. Even as it continued filing briefs in its court cases, Altour Service dissolved as a company in April 2014.

Altour Service shared an address with a much larger firm, the 1,500-employee Altour International, but that firm has no legal responsibility for its debts, according to Altour Service’s attorney.

Like Altour Service, Altour International was run by a businessman named Alexandre Chemla, who remains its president. Altour Service’s 2014 certificate of dissolution listed Chemla as chief executive officer and listed 1270 Avenue of the Americas, 15th floor, as the dissolved company’s address. Altour International resides at the same address, same floor.

“Altour Service and Altour International were separate corporate entities involved in different lines of business,” Justin Sher, an attorney for the now-liquidated Altour Service, told POLITICO in an email. “Altour Service was not a subsidiary of Altour International. Altour International has no obligations with respect to Altour Service’s debts.”

Asked about whether Altour International would speak on its own behalf, Sher responded in an email, “I am in touch with the company, and it has no further comment.” Altour International did not respond to a request for comment from Chemla.

Altour Service’s former limousine drivers, though, think those who backed Altour Service, and profited from it, should still be held accountable for its debts.

“They dragged it out for years,” one of the drivers, Edgar Lewis, told POLITICO. “The finding was that we were right and they were wrong. But then Altour and its management — they refused.” Another driver, Fredy Monzon, said he hadn’t received any back pay, either. “To me, this is news,” he said. “Jesus Christ … I didn’t realize how much I was awarded.”

A third driver, lead plaintiff Raymond Hulen, declined to speak to POLITICO directly. But through a friend, Kenneth Brown, he confirmed that he not received any money, either, as of last December. “All the money you spent [to go to court] is way more than it would cost you to reimburse your employees and give them their money back,” Brown said, referring to Altour Service.

When POLITICO asked Sher, the Altour Service attorney, whether any of the 25 drivers received their back pay, Sher emailed that Altour Service was “party to an agreement that contains confidentiality restrictions and will not comment further about the details of any payments.”

***

In general, larger companies avoid the risk of violating wage-and-hour laws by keeping low-wage workers off the payroll. Unlike small businesses, big ones can’t easily be dissolved, and they’re much more sensitive to bad publicity. They also make fatter targets for wage-theft investigations because they have deeper pockets.

Big companies typically steer clear of low-wage workers through what Weil, who administered the Labor Department’s Wage and Hour division under Obama, called “the fissured workplace” in an influential 2014 book of that name.

Weil cited three ways in which a large company typically avoids responsibility for low-wage workers. It can contract hourly work out to another, smaller company — for example, by hiring a janitorial service rather than employing janitors directly. Or the big company can consign hourly work to franchisees; more than 80 percent of McDonald’s restaurants are owned not by McDonald’s but by McDonald’s franchises, who do the hiring and firing. Or the big company can classify certain workers as independent contractors (i.e., “gig” workers), as Federal Express’ ground service has done with its drivers.

Whenever “there’s attenuated supply chains and so much subcontracting, it’s much harder to track down the contractor,” Janice Fine, a professor at Rutgers University, explained.

“Fissuring” the workplace has allowed big companies to focus on their core competencies, enhancing productivity. But it’s also increased the likelihood that wage-and-hour laws will be violated. Low-wage employers win contracts by bidding low; franchisees, by signing franchise contracts that, especially with big brands, can be financially burdensome; and independent contractors, by working for whatever the buyer is willing to pay. (Independent contractors, who theoretically work on their own, are not covered by minimum-wage laws.) All three downstream arrangements squeeze profit margins, creating, for contractors and franchisees, a potential incentive to cut corners on labor laws.

A large company needn’t worry it will be held liable for any wage theft committed by a contractor or franchisee unless it can be demonstrated that the large company’s arms-length relationship with the contractor or franchisee’s low-wage workers is a fiction. That’s difficult to prove.

The Obama administration made it somewhat easier by broadening the legal criteria for classifying a company a so-called joint employer. But the Trump administration reversed that policy in December in a ruling from its majority-Republican National Labor Relations Board.

In September, Trump nominated Cheryl Stanton to lead the Labor Department’s Wage and Hour division. Since 2013, Stanton has been executive director of the Department of Employment and Workforce in South Carolina, one of the states that dedicates not a single government employee to investigate minimum wage and overtime violations.

Stanton was herself sued in March 2016 for failing to pay a housekeeper named Laurie Titus, the nonprofit Center for Investigative Reporting reported in July. “I have emailed, mailed and certified mailed trying to get payment,” Titus said in her complaint, which requested $360 for four cleanings in September and October 2015, plus $80 to cover court costs and $125 in late fees. Last year, Stanton resolved her dispute with Titus, who told the court that Stanton had “paid in full.”

The Labor Department declined to comment on Stanton’s dispute with Titus, and declined a request for comment by Stanton, who is awaiting confirmation.

A source familiar with Stanton’s dispute with Titus told POLITICO that “this was a contractual dispute with a company, not a wage dispute with an individual … it involved what days services had been performed and what had been paid.”

***

The simplest way to prevent employers from simply closing up shop and avoiding wage-theft judgments would be for both the federal government and state governments to give their labor departments and individuals the authority to file liens, or property claims, even before a state agency or court determines whether the claim has merit, according to workers’ advocates. That way, a company’s assets would be secured even if the owner tries to close up shop.

Liens are not a new concept. They date back to 1791, when Thomas Jefferson and James Madison requested that the Maryland state Legislature create a so-called mechanics’ lien to speed up construction of Washington, D.C. Today, every state has a mechanics’ lien allowing a construction worker to, in effect, seize some portion of the property he’s helped build if his contractor fails to pay him. In addition, there are about 600 state lien laws that apply to other professions, from jewelers to veterinarians.

Many state governments have given their labor departments the authority to place a lien on an employer’s property only after they determine that a worker is owed money. Because a final judgment can take many months, worker advocates say such laws give employers too much time to fold their companies, transfer their assets, or reincorporate under a different name. Prejudgment liens, they argue, would discourage employers from using these tactics.

“I don’t think it’s going to get us to 100 percent, but a generalized wage lien is going to get us a lot closer,” said Hollander, of Community Legal Services of Philadelphia. “It gives you the ability to put a hold on the employer’s property from the beginning of the case so there’s not the opportunity for the employer to divest.”

Wisconsin and Maryland have broad prejudgment liens. Similar bills have been introduced in New York, Connecticut, Washington State, Oregon and California.

Wisconsin’s law that allows for prejudgment liens was enacted 1976. Under the law, the state’s Department of Workforce Development or a worker claiming wage theft may file a notice of lien in county court before a judgment is reached on the merits of the case. As a result, fully 95 percent of claims filed with the Wisconsin Department of Workforce Development were “settled, dismissed or paid in full” between 2007 and 2012,” according to an analysis by UCLA and the National Employment Law Project, a left-leaning nonprofit.

On the other hand, Maryland’s prejudgment lien law, passed in 2013, has yet to make much difference because its Department of Labor has never used it. One problem, worker advocates in Maryland say, is that many scofflaw employers don’t have any assets to seize.

Businesses have fiercely opposed prejudgment lien laws. When California considered prejudgment liens in 2013, a broad coalition of business groups led by the California Chamber of Commerce wrote state legislators that such liens would “cripple California businesses” by allowing liens “on an employer’s real property or any property where an employee ‘bestowed labor’ for an alleged, yet unproven, wage claim.” They further argued that the bill would hurt commercial and real estate investments by prioritizing wage theft liens over other liens.

Some alternatives to prejudgment lien laws have been considered. In Texas, Rep. Mary González, a Democrat representing El Paso, introduced a bill in 2016 that would create a database of employers who have failed to pay their workers the wages that they are owed legally. In New York, after The New York Times ran a series on wage theft in New York City nail salons, Gov. Andrew Cuomo issued an executive action that required nail-salon owners to purchase wage bonds to guarantee that workers awarded stolen wages actually receive their money. Under the executive action, if a nail salon owner decided to fold, the surety bond company would pay the workers.

Tools like prejudgment liens and wage bonds might help workers recover their wages, but, advocates insist, they won’t be effective without a stronger commitment from states. For states to do a better job enforcing wage and overtime laws, they must first demonstrate that they care enough to devote the manpower necessary. Until they do that, advocates say, the nation’s wage-and-hour laws will be followed only when employers feel like doing so.

Said Rep. Bobby Scott (D-Va.), ranking member of the House Education and the Workforce Committee: “If there is not strong enforcement of wage theft, then any efforts to raise the minimum wage, strengthen overtime, or protect workers’ tips are ineffectual.”

CORRECTION: This story has been updated to correct the spelling of Sally Dworak-Fisher’s name.

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Consolidation phase over, telecom firms set for growth war

Reliance Jio has forced incumbents to either match its offers or exit the market completely. Photo: Abhijit Bhatlekar/Mint

Reliance Jio has forced incumbents to either match its offers or exit the market completely. Photo: Abhijit Bhatlekar/Mint

New Delhi: In the past 18 months, Reliance Jio Infocomm Ltd has triggered a bloody consolidation in the telecom sector, forcing incumbents to either match Reliance Jio’s offers or exit the market completely.

Among the last ones to exit the market will be Aircel Ltd, which, according to a report in The Economic Times, plans to file for bankruptcy at the National Company Law Tribunal (NCLT).

Reliance Jio’s entry strategy has already worked for Mukesh Ambani, with the latest data made available by the telecom regulator showing that its market share has doubled to 13.71% by December end 2017, from 6.40% a year ago.

Trai’s latest order on tariff rules has given the green signal to Reliance Jio to continue with its promotional offers. But experts say Reliance Jio will now face strengthened competitors in Bharti Airtel Ltd and the Vodafone-Idea combine.

“Earlier, subscriber additions were equated with the success of the business. Now with consolidation almost over and with the three top players reaching a sizeable market share, the focus now must shift to retaining customers and how to ensure growth,” said Amresh Nandan, research director at Gartner.

Significantly, Airtel, Idea Cellular Ltd and Vodafone India have retained their respective market shares, which implies that Reliance Jio has grown partly at the cost of these smaller players and largely by grabbing a chunk of the new subscriber additions to the overall base.

As of 31 December 2017, Airtel had 24.85% of subscriber market share, Vodafone had 18.2%, Idea had 16.83% and Reliance Jio had 13.71%.

“Operators now cannot rely on selling packets of data to individual consumers and will need to focus on ‘solution sales’ for enterprise businesses, apart from looking at 5G use cases—smart city applications such as traffic management, waste management, apart from telemedicine, etc.,” said Rajan Mathews, director general of COAI.

With the advent of these new offerings, what could also work to Reliance Jio’s advantage is that it is the newest entrant in the sector.

“Networks that were earlier designed to offer primarily voice and data need to be transformed to offer these new products. To that extent, Reliance Jio, with a greenfield network, has an advantage over other operators who need to focus on cost effectiveness, put in investment in infrastructure and be willing to take a hit on Ebitda (earnings before interest, taxes, depreciation and amortization) in the short run to win the long-term battle,” Nandan said.

This advantage would, however, be short-lived, with incumbent operators such as Airtel looking to monetize their assets, while the Idea-Vodafone combine gets ready to benefit from cost synergies once the merger is completed. Bharti Airtel is already considering a potential initial public offering for its Africa unit.

“A new incumbent always has an edge. But how long can this advantage be sustained? It will quickly be replicated by incumbents. Airtel, Idea and Vodafone, they all are catching up very quickly in the 4G rollouts,” Mathews said.

What is, however, clear from the recent tariff changes in the past two months is that Reliance Jio will lead other operators in offering cheap tariffs. RIL chairman Mukesh Ambani said in February last year that Reliance Jio would monitor all publicly announced plans from all operators and not only match the highest selling tariffs but also provide 20% more data in each of these plans.

“Reliance Jio has 160 million subscribers today. Its internal target is 500 million. The price war will continue till Reliance Jio gets at least 35% market share. Also, with the latest Trai order on tariff assessment, the regulator has given a green signal to Reliance Jio to go ahead with its aggressive pricing,” a Mumbai-based analyst said on condition of anonymity.

Trai, in an order issued on 16 February, said there was no need to place restrictions on the number of promotional offers from telecom firms as long as they were transparent, non-predatory and non-discriminatory.

“We expect it (Reliance Jio) to continue with brutal pricing and incumbents to match it,” the analyst cited above said.

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POLL-Over half of Japan firms say no plan to raise base…

Reuters

Feb 20 (Reuters) – More than half of Japanese companies do not intend to raise base pay at spring wage talks this year and even those that do say they will keep increases in line with last year, a Reuters poll found. Below are the questions and answers to the poll conducted between Jan 31 and Feb 14 for Reuters by Nikkei Research. Answers are denoted in percentage points, while poll and reply totals are represented in actual figures. 1. Do you plan to raise base pay at this spring’s wage negotiations with labour unions? Sectors Yes No Polled Replied All 48 52 544 236 Manufacturers 52 48 265 125 Non-Manufacturers 44 56 279 111 1a. If you answer yes to the question above, by how much do you plan to raise base pay? (Pick one) Sectors More than Same as Less than Polled Replied last year last year last year All 14 76 10 544 111 Manufacturers 14 75 11 265 63 Non-Manufacturers 15 77 8 279 48 2. Have labour costs declined from the previous year due to cuts in long working hours? Sectors Yes No Polled Replied All 32 68 544 242 Manufacturers 30 70 265 129 Non-Manufacturers 34 66 279 113 2a. Do you plan to pay employees back the money left by declines in overtime pay due to cuts in long working hours? Sectors Yes No Polled Replied All 29 71 544 236 Manufacturers 26 74 265 125 Non-Manufacturers 32 68 279 111 3. Do you think a 3 percent wage rise is a realistic target for your company? (Pick one) Sectors Yes, Yes, to a Not really Out of the Polled Replied absolutely degree question All 5 36 52 7 544 244 Manufacturers 2 41 48 8 265 130 Non-Manufacturers 9 31 55 5 279 114 4. How will implementation of ‘equal pay for equal work’ affect labour costs? (Pick one) Sectors Rise Rise No change Lower Lower Polled Replied considerably slightly slightly considerably All 11 46 42 1 0 544 245 Manufacturers 10 48 41 2 0 265 130 Non-Manufacturers 11 44 43 1 0 279 115 4a. If you foresee labour costs rising, what will be the most effective way to avoid such an increase? (Pick one) Sectors Differenti Lower pay Reduce No need Others Polled Replied ate jobs levels employees for any steps All 56 1 15 13 15 544 136 Manufacturers 58 0 20 9 12 265 74 Non-Manufacturers 53 3 10 16 18 279 62 5. Before a revised labour contract law in April starts forcing companies to give permanent status to temporary workers who have served more than five years, if they request it, have you terminated or do you plan to terminate contracts with such temporary workers? Sectors Yes No Polled Replied All 11 89 544 240 Manufacturers 11 89 265 127 Non-Manufacturers 12 88 279 113 (Reporting by Tetsushi Kajimoto; Editing by Neil Fullick)

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Riverbed helps QLD’s largest law firm ‘boost employee productivity and accelerate innovation’

Riverbed Technology  has today announced that McCullough Robertson Lawyers, billed as Queensland’s largest law firm, has “deployed Riverbed SteelCentral Aternity to close the visibility gap between how its lawyers are experiencing applications and services, and what the IT team could previously see with its existing set of monitoring tools”.

As a result of this added visibility, we’re told that “the IT team can now proactively diagnose and resolve performance issues, improving the digital experience and enabling staff to spend more time delivering superior client service”.

For more than 90 years, McCullough Robertson Lawyers says it has “delivered trusted advice to major Australia and foreign-owned corporations, financial institutions, governments, private enterprises and high net worth individuals”, and has a “450-strong workforce spans offices in Brisbane, Sydney, Melbourne and Newcastle”.


A bit of background illuminates that “handling urgent requests for its large volume of clients is common, and timing is critical”.

In addition, “long hours and late nights put added stresses on lawyers who simply expect technology to assist, not hinder them”.

Thus, as McCullough Robertson Laywers “continued to grapple with its ageing infrastructure, employee complaints about the performance of devices, applications and services increased – especially in offices like Sydney, located far from their centralised IT in Brisbane”.

Ron Dutta, director of IT, McCullough Robertson Lawyers, said: “We initially approached Riverbed to assist with improving the performance of our network.

“And while they proved early on they could meet that need with their WAN optimisation solution, SteelHead, we quickly learned that our lack of visibility into how users were actually experiencing apps and services was hindering performance as well – and in a major way.”

We are given one example where “it was taking a lawyer up to two minutes (with averages of around one minute) to open and send an email”.

“Existing monitoring tools told IT that all systems were running fine. McCullough Robertson Lawyers ran a proof of concept with SteelCentral Aternity and was able to verify the user issue and diagnose that it was stemming from a non-standard installation of Outlook across a large portion of the business.”

Dutta explained: “Through that one user complaint, we were able to identify that a quarter of our users were affected. To put it into perspective, we were losing about 75 hours of productivity per day on an issue our existing monitoring tools couldn’t see. Once the issue was solved, productivity spiked and levels of client-service increased across the business.”

Riverbed says: “SteelCentral Aternity extends McCullough Robertson Lawyers’ visibility into end-user experience of every enterprise app in their portfolio, running on any physical, virtual, or mobile device.”

Dutta added: “Aternity provides the insights our IT team need to understand app performance, diagnose issues and improve service levels for employees, proactively, remotely, and non-invasively. We can now troubleshoot between network and device issues at speed, and resolve issues without interfering with the productivity of our lawyers.”

Foundation for the digital age

While the implementation process is ongoing, Dutta said the system would be instrumental in enabling greater innovation at the firm, and critical in its efforts to improve efficiency and processes for the digital age.

“Lawyers don’t want to have to focus on technology – for them it’s just a mechanism to deliver to their clients more quickly,” Dutta continued.

“We are focused on launching IT projects and initiatives which allow them to simply get on with the job. But to get there, we must ensure our systems are running as efficiently as possible, and this is something that requires clear visibility on how our applications and networks are performing, right down to each end user.”

Both companies say that Riverbed SteelCentral Aternity is “the first step in achieving this ambition”.

Since implementing the technology, McCullough Robertson Lawyers says it has “seen the potential for significant performance increases, and it’s allowed the firm to standardise protocols”.

“Thanks to the Riverbed solution, McCullough Robertson now has the required visibility to know where we need to prioritise our efforts in improving our IT,” said Dutta.

Delivering greater value to the business

We’re told that SteelCentral Aternity has “also empowered the IT team at McCullough Robertson Lawyers to pro-actively contribute value to the business, rather than reactively dealing with issues”.

“The use of Riverbed SteelCentral Aternity represents a major culture shift at McCullough Robertson Lawyers. IT is now seen as a trusted partner in our business, capable of giving employees time back in their working day – which is invaluable in our profession,” Dutta said. He expects to see other firms follow McCullough Robertson Lawyers’ IT transformation.

“Legal firms across the world operate using the same applications, productivity tools and systems and the issues we face are often the same in other law firms. We are also a collaborative industry and I’m already seeing strong interest in what we are doing here across the Australian legal landscape.”

So, what is a bit more info on Riverbed delivering solutions for cloud and digital world?

As you’d expect, Riverbed tells us it is “delivering solutions to help companies transition from legacy hardware to a new software-defined and cloud-centric approach to networking, and improve end user experience, allowing enterprises’ digital transformation initiatives to reach their full potential.”

It further proudly boasts that its “integrated platform delivers the agility, visibility, and performance businesses need to be successful in a cloud and digital world”.

By leveraging Riverbed’s platform, the company says “organisations can deliver apps, data, and services from any public, private, or hybrid cloud across any network to any end-point”.

Claiming its Riverbed SteelHead solution is “the industry’s #1 optimisation solution for accelerated delivery and peak performance of applications across the software-defined WAN”, the company says its SteelCentral product family is “a performance management and control suite that combines user experience, application, and network performance management to provide the visibility needed to diagnose and cure issues before end users notice a problem, call the help desk, or jump to another web site out of frustration”.

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New Tax Regs Fuel Flurry at Accounting Firms

The year 2018 promises to be a robust one for accounting firms in the San Fernando Valley area, and the big driver of the windfall of work is, of course, the new federal tax law.

The tax reform “is a great opportunity for our clients,” said Greggory J. Hutchins, partner at Holthouse Carlin Van Tright LLP, a CPA firm with 11 offices, including Encino, Westlake Village and Camarillo. However, he added, “It’s going to take their companies’ resources to take on these analyses.” (Holthouse Carlin ranks No. 2 on the Business Journal’s accompanying list of accounting firms with 64 CPAs in the Valley area.)

Since winning Congressional approval in late December, the Tax Cuts and Jobs Act — which reduces the corporate tax rate from 35 percent to 21 percent and includes a more generous repatriation provision for businesses with overseas earnings — has been the talk of the figurative town.

“Tax reform has been a major piece of most conversations with most clients. They are continuing discussions,” said Jay Mangel, the managing partner in Los Angeles and Orange County at Crowe Horwath LLP, a 75-year-old firm which ranks No. 5 on the list with 44 CPAs locally.

The law’s effect would seem to be simple – how hard can cutting tax rates be? – but it quickly becomes more complicated once the specifics of the law are applied to individual cases. Worse, those specifics aren’t settled yet. The law has yet to be translated into regulations by the Internal Revenue Service. So the law is in effect this year, even though many of its provisions remain unclear.

That means there’s lots of decisions up in the air and yet to be made. For example, company owners and managers must figure out whether to withdraw earnings or leave them vested in the company or even whether to sell or hold onto companies, Hutchins said.

Legislative analysis

E. Todd Van der Wel, partner in charge at Moss Adams in the firm’s downtown Los Angeles and Woodland Hills offices, said tax reform’s effects will be wide-reaching. (Moss Adams ranks No. 32 with 13 CPAs locally.

“The tax act is going to create a lot of disruptions,” Van der Wel said. “This is the first time in 30 years that this has happened. It happened on very short order over the holidays. A lot of tax folks were working over the holidays.

“A lot of interpretation is going on to figure out how the act is going to (play out),” he continued. “It’s going to take time to align all the pieces in the rules.

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