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Barrister Banter: Tim Crippen

The purpose of the series is to bridge the gap between junior and senior business lawyers in Oregon, fostering understanding and camaraderie. Read on to learn more about Tim’s choice to pursue a career in law, what being a business lawyer means to him, and his advice for junior and senior lawyers.

  1. Tell me about your path to being a lawyer. What inspired you to pursue this career? 

When I started college, I was interested in an academic career, but I realized I wanted more engagement with commerce and government, and I wanted more control over where I would live. Which, together, directed me to law school. My parents owned a small business most of my childhood, so representing closely held business owners and families felt like a natural fit.

  1. What is your practice area?

I am a business lawyer, which can mean a lot of things. I have run some very high-stakes and sophisticated M&A transactions working alongside lawyers at the world’s largest firms, but most of the time I am working with Oregon and Washington operating businesses and holding companies.

I spend a fair amount of time helping people and institutions in business crises, such as business break-ups or high-stakes regulatory issues.

  1. How long have you been in your current role?

I joined Black Helterline in 2012, became a partner in 2018, and have served as managing partner since January 1, 2026.

  1. How have you seen the practice change since you started practicing?

For many clients, the relationship with their lawyer is unusually personal. They’ll call at all hours, and often I’ll answer. That doesn’t happen with most other businesses they interact with, such as their medical providers, their cable company, or the taxing authorities.

That said, from private clients and individuals, expectations have evolved in healthy ways. Clients understand that work and life are blended, and they’re fine with an initial response like, “I’m not at my desk, but here are my preliminary thoughts and I’ll circle back.” I don’t feel stuck to my desk from 8 to 6, waiting in case the phone rings, but responsiveness and follow‑through matter as much as ever.

  1. What do you wish you had known before you started working as a new lawyer?

Execution matters. Being the smartest person, or the best public speaker, is good and important, but being the person who gets things done, especially under pressure and time constraints, matters a lot. And showing up consistently for people builds long-term trust, which is valuable for business development and valuable when things don’t go perfectly. This applies equally to coworkers, referral sources, and clients. For junior attorneys, showing up consistently shows your partners or supervisors that you’re dedicated to getting things right.

  1. What are your career highlights?

One highlight was working closely with the Oregon State University leadership and a passel of other excellent lawyers in the Pac-12’s recent transitions. Among other things, the OSU leadership are smart and tough, but also incredibly positive and supportive collaborators, which made a challenging situation manageable to work through.

For years I have worked with many different families, individuals, and closely-held businesses that I hope to steward for the next generation. These are rarely high-profile, but they are deep and satisfying relationships built on mutual trust and respect.

  1. What is your favorite part of the job?

Laughing with colleagues and clients while working on very tricky problems.

  1. What parts of the job do you wish you could outsource to AI?

So far, AI for me has been another smart colleague in the room. I’ll check what Claude has to say, then ask the appropriate folks in my office, then research what the state of the art is in treatises, cases, or other publications to inform the advice I give my client. AI has not replaced judgment and experience, but it is another resource to expedite and refine client service.

  1. What advice would you give a new business lawyer?

Make yourself interested in your clients—their businesses and industries, their families, and their long-term goals. Read voraciously on all kinds of topics, but especially on business and government news applicable to the communities you serve. If I did not find this stuff interesting, I would not have lasted three months.

  1. What advice would you give a senior lawyer who is charged with mentoring a new lawyer?

Every new lawyer has blind spots, and it behooves the senior lawyer to gently figure out what they are and help them fill those gaps. ♦

Understanding the Obligations of a Business Under the Oregon Consumer Privacy Act

Alec Marlega, Arnold Gallagher PC

Over the last decade, the collection and sale of consumer data have played an increasing role in online interactions. In response, states have implemented consumer privacy protections. Oregon joined this trend in 2023 with the passage of Senate Bill 619 and adoption of the Oregon Consumer Privacy Act (OCPA). At the highest level, OCPA regulates businesses that collect and sell consumer information. Data brokers are the prime target, but OCPA can also apply to businesses that incidentally collect or utilize consumer data. For example, a business that stores emails from past customers to send weekly adverts may be subject to OCPA depending on the number of consumers whose information is stored.

Whether learning about it from the news or third-party vendors, businesses have questions about OCPA. What is it? What do they need to do? The Oregon Attorney General, Legislature, and Courts will continue to refine the specifics, but this article seeks to provide a broad overview. As always, there are complexities beyond this article and OCPA may be modified and refined, so careful attention should be given before the collection and use of consumer data.

Who does OCPA apply to?

OCPA applies to any person or entity that conducts business in Oregon or provides products or services to Oregon residents and controls or processes (a) the personal data of 100,000 or more consumers (personal data processed solely for the purpose of completing a payment transaction is excluded) or (b) the personal data of 25,000 or more consumers if 25 percent or more of the person or entity’s annual gross revenue is derived from selling personal data. ORS 646A.572. “Personal data” is any unique identifier that is reasonably linkable to a consumer—for example, names, emails, phone numbers, login information, website visits, prior purchases, approximate location, and other information so long as it could be reasonably linked to a consumer. ORS 646A.570(13)(a). Under ORS 646A.570(7), “consumer” is limited to Oregon residents. If an entity stores or collects any information that could be reasonably linked to 100,000 Oregonians, OCPA applies, and if the information is sold, the lower threshold of 25,000 may apply.

Many entities may assume they are well below the 100,000-Oregonians threshold. Oregon’s population is about 4.2 million, so 100,000 is about 2.38 percent of the entire state. However, businesses should keep in mind that many websites may passively collect information that constitutes personal data. Additionally, it may not be possible to distinguish the personal data of Oregon consumers from the personal data of consumers from other states. Accordingly, an entity should review its online presence and determine all the information collected. This is especially true if the website is managed or hosted through a third-party vendor, as those agreements may contain boilerplate language that permits the third-party vendor to collect and use consumer data in ways beyond what an entity intends.

While most entities will need to consider OCPA, it does not apply to public bodies, and certain classes of data are excluded. ORS 646A.572(2). Employment data is excluded, but most other exclusions relate to data already covered by a different federal law. Although public bodies are exempt, 501(c)(3) entities are not (though 501(c)(3) entities did have an extended period to comply with OCPA that expired July 1, 2025).

Processor or controller?

Assuming OCPA applies, the next question is whether the person is a controller or a processor. The controller determines what data to process and the methods of processing. ORS 646A.570(8). Alternatively, a processor only processes the personal data on behalf of the controller. ORS 646A.570(15). The definition of processing includes any action, operation, or set of actions regarding personal data (such as collecting, storing, disclosing, analyzing, deleting, or modifying). ORS 646A.570(14).

For small businesses, the most common controller-processor relationship arises when a business (controller) contracts with a third-party vendor (processor) to collect and store consumer information. For example, assume there is a business called Widgets R’ Us that sells widgets and wants to establish an online storefront. It also wants to implement a loyalty program so it can track the spending trends of and provide targeted advertisements to its repeat customers. Widgets R’ Us uses a third-party vendor to set up its website (e.g., WordPress, Shopify, or Squarespace). To capture the data that Widgets R’ Us wants, it may authorize the third-party website vendor—let’s say Shopify in this example—to collect personal data from consumers that visit their webpage. In this scenario, Widgets R’ Us is the controller and Shopify is the processor.

Processors must adhere to instructions provided by the controller. There must be a binding contract between the processor and controller that specifies the rights and obligations of both parties and requires the processor to assist the controller in responding to OCPA requests. ORS 646A.581(1)-(2). The controller may require that the processor indemnify the controller for damages arising from the processor’s non-compliance with OCPA. However, the contract cannot relieve a controller from statutory liability for the processor’s actions. ORS 646A.581(3). Additionally, this allocation of risk can be a negotiation point. A smaller business like Widgets R’ Us may struggle to convince Shopify to modify its form terms. Regardless, it remains critical to review all terms to ensure compliance and that the controller can perform its OCPA obligations.

Consumer rights and how a controller can comply

OCPA grants consumers rights and imposes obligations on controllers and processors. Prior to processing data, a controller must provide a privacy notice. The privacy notice must (a) list the personal data collected, (b) describe the use of the personal data, (c) explain how a consumer may exercise their OCPA rights (including the appeals process), (d) list the personal data shared with third parties, (e) identify the categories of third parties that the controller shares the consumer’s personal data with, (f) provide an email or other contact method, (g) identify the controller, and (h) describe any processing for targeted advertising or profiling purposes (and how the consumer may opt out). ORS 646A.578(4). A controller may only process data as described in the privacy notice and only for the stated purposes. ORS 646A.578(1). Many websites incorporate a privacy link into the home page of their website. For example, Google has a privacy link on the bottom right of its home page that directs consumers to its privacy policies.

In addition to the privacy notice, a consumer may request (a) confirmation of whether the controller is processing the consumer’s data and the categories of personal data the controller processes, (b) the third parties the controller has disclosed the consumer’s personal data to, and (c) a copy of the consumer’s data the controller has processed. ORS 646A.574(1). A consumer may also request corrections, deletion of the consumer’s information, or opt out of the controller’s processing of the consumer’s data for targeted advertising, the sale of personal data, or profiling. ORS 646A.574(1).

Consumers must submit requests in the manner provided by the controller. ORS 646A.576. However, the manner must be consistent with the ways the consumer normally interacts with the controller. ORS 646A.578(5). For example, Widgets R’ Us can require that its loyalty members use an existing account, but it cannot require a new or additional account. Additionally, assuming most of the Widgets R’ Us’s consumers interact through the website, there should be a link on the webpage for the consumer to submit an OCPA request. Often this will be included as part of the privacy notice. If a business does not have the infrastructure for a direct opt-out link, it may list an email that consumers may submit OCPA requests to.

After the consumer has made their request, Widgets R’ Us must respond within forty-five days. ORS 646A.576(5)(a). If needed, Widgets R’ Us can request additional information to verify that the request is not fraudulent or notify the consumer that another forty-five days are needed to process the request. ORS 646A.576(5)(a, d). Widgets R’ Us must provide any information requested by the consumer free of charge but may charge a reasonable fee if a consumer makes multiple requests within a twelve-month period. ORS 646A.576(5)(c).

If Widgets R’ Us declines a consumer’s request, it must explain why and describe the appeals process. ORS 646A.576(5)(b). The appeals process must (a) allow a reasonable time, (b) be conspicuously available, (c) be similar to the process by which the consumer made its initial request, and (d) provide that the appeal must be ruled on within forty-five days. ORS 646A.576(6). This information should also be included in the privacy notice. If an appeal is rejected, Widgets R’ Us must provide the Oregon Attorney General’s contact information so the consumer may make a complaint if it wishes. ORS 646A.576(6)(d). As of this writing, the complaint form can be found at the Oregon Department of Justice’s website.

In addition to responding to requests, controllers need sufficient security measures to protect the data it collects from cyber-attacks or inadvertent disclosure. This includes data protection assessments if the processing involves targeted advertising, profiling, processing sensitive data, selling personal data, etc. ORS 646A.586(1). These assessments must weigh how processing data benefits the controller and consumers and the safeguards the controller employs to mitigate the risks. ORS 646A.586(2). All assessments must be retained for five years and can be requested by the Oregon Attorney General as part of an investigation. ORS 646A.586(2), (5). At a minimum, controllers must have safeguards to consistent with ORS 646A.622, which describes the compliant safeguards to protect from identity theft. ORS 646A.578(1)(c).

What are the requirements for sensitive data?

Sensitive data and the personal data of consumers under sixteen years of age are subject to heightened restrictions. “Sensitive data” is data that reveals a consumer’s racial or ethnic background, national origin, religious beliefs, mental or physical condition, sexual orientation, gender identity, status as a victim of a crime, or citizenship or immigration status; is the personal data of a child; precisely identifies the location of a consumer within 1,750 feet; or is genetic or biometric data. ORS 646A.570(18). A controller may not process any sensitive data without consent or, in the case of children, without compliance with the Children’s Online Privacy Protection Act of 1998. ORS 646A.578(2)(b). Further, a controller may not process any personal data for targeted advertising or profiling if the controller has actual knowledge or willfully disregards that the consumer is under sixteen years of age. ORS 646A.578(2)(c).

One possible way to obtain this consent is through a check-the-box system that pops up when a consumer first opens a website, which is becoming increasingly prevalent. This could be potentially paired with a link to the privacy notice and require the consumer acknowledge that they have reviewed the privacy notice and consent to the business’s processing of the consumer’s sensitive information. That said, regardless of consent, a controller may not sell personal data of a consumer if the controller has actual knowledge or willfully disregards that the consumer is under sixteen years of age or the data precisely locates a consumer with 1,750 feet. ORS 646A.578(2)(d).

What are the enforcement mechanisms?

Enforcement of OCPA lies exclusively with the Oregon Attorney General, who has broad discretion in investigating, so there is no private right of action (this is notably different from the California Consumer Protection Act, CCPA, which provides a private right of action). Following an investigation, the Oregon Attorney General may seek a civil penalty of not more than $7,500 per violation or to enjoin an ongoing violation. ORS 646A.589(4). If successful, the court may also award reasonable attorney fees and costs to the Oregon Attorney General. ORS 646A.589(4). Such claims must be brought in either Multnomah County or the circuit court of a county where any part of the violation occurred. ORS 646A.589(4). Actions must be brought within five years of the controller’s violation. ORS 646A.589(5). Although OCPA does not create a private right of action, the nature of data storage means that a controller liable for one violation may be liable for several, which could significantly compound the penalty.

What does OCPA mean in practice?

The Oregon Attorney General released an Enforcement Report in August 2025, which shed light on the enforcement of OCPA in its first year. Specifically, in the first year of enforcement 214 consumer privacy complaints were received. Enforcement Report: The Oregon Consumer Privacy Act, The First Year (August 2025). Of these, the most complaints (sixty-two) involved data brokers, with social media platforms as a close second. The most frequent complaint by a significant margin was a failure to delete data upon request. Assuming this continues, the best way for a controller to mitigate the risk of an OCPA complaint will likely be timely responding and complying with consumer requests.

While not the main target of OCPA, many businesses that operate online will be unable to ignore OCPA entirely. Even if a business believes it falls beneath the 100,000-Oregonians threshold, many websites passively collect information from its consumers. Additionally, the focus on consumer privacy rights continues to grow, so entities not currently subject to OCPA may wish to jump-start compliance to show consumers a respect for privacy. As bigger tech companies require OCPA compliant systems from smaller partners, it may be in an entity’s best interest to comply even if not legally required.

As mentioned above, Oregon is not the first to adopt consumer privacy protections. California adopted the CCPA as one of the first state consumer privacy protection acts, and it is the one most likely to be explicitly referenced. While anecdotal, I have seen recent data processing agreements defining “Data Protection Laws” as state privacy laws, including the CCPA and similar state privacy laws. This language reflects the difficulty in capturing different laws that have the same goals and are very similar but are not identical. For example, CCPA provides a private right of action and has slightly different applicability thresholds than OCPA. Absent a uniform code, businesses should be careful of a national third-party vendor relying solely on its CCPA compliance as proof it has covered all consumer privacy protections. OCPA is very similar to CCPA, but it is not identical, so businesses should ensure all OCPA required privacy notices and practices are in place because, ultimately, liability under the statute rests with the business. ♦

Representations and Warranties Insurance in M&A Transactions: An Overview and Evolving Market Trends

Mark Reinhardt, Best Best & Krieger LLP

Representations and warranties insurance (RWI) has moved from a niche product used primarily by private equity buyers to a mainstream feature of middle-market M&A transactions. Indeed, a recent report from an Am Law 200 firm states that nearly thirty underwriters now offer RWI and that, in its 2024 deal set, the product was used in 89 percent of transactions with enterprise values between $100 million and $1 billion, and in 63 percent of deals with enterprise values between $25 million and $100 million. For those advising clients on acquisitions or exits of sufficient value, understanding how RWI works, and how it has reshaped deal terms and purchase agreement provisions in recent years, is essential.

What is RWI?

RWI is a specialized insurance product that covers losses arising from breaches of representations and warranties in a purchase agreement. Instead of relying solely on a seller’s indemnification obligations, a buyer can recover covered losses from an insurer. In a typical transaction, the buyer purchases the policy (though sell-side policies are also used in certain situations). The policy effectively shifts a portion of post-closing risk from the contracting parties to a third-party insurer.

RWI generally does not eliminate the need for buyer due diligence or negotiated representations and warranties, as insurers rely heavily on the buyer’s diligence process and the negotiated agreement when underwriting coverage. However, RWI can significantly reduce deal friction in negotiating risk allocation between the contracting parties.

In some cases, a buyer can even obtain insurance coverage for representations, warranties, and indemnities that the buyer wants but the seller is unwilling (or unable) to give in the transaction documents, for example, in distressed M&A transactions. This form of insurance is commonly known as “synthetic warranty and indemnity (W&I) insurance.” A synthetic W&I policy “deems” a set of representations and warranties to have been given in the transaction documents, and the buyer’s recourse for any breach or inaccuracy of such deemed representations or warranties is solely against the insurer, not the seller

RWI can benefit both buyers and sellers

For sellers with sufficient deal leverage and transactions with sufficient enterprise value (usually over $20 million), it is becoming increasingly common to require the buyer to obtain an RWI policy because it gives the seller a cleaner exit and faster access to proceeds.

  • Reduced escrow and indemnity exposure. In a traditional M&A deal, sellers place a portion of the purchase price in escrow, or allow the buyer to “holdback” a portion of the purchase price, to secure indemnification obligations. With RWI, that escrow is often significantly reduced (or eliminated), because the buyer looks primarily to the insurer for recovery.
  • Greater certainty of proceeds. By minimizing or eliminating post-closing indemnity exposure, sellers can distribute proceeds more quickly and with greater confidence that they will not be clawed back.
  • Reduced post-closing friction. When claims are directed to an insurer rather than the seller, the likelihood of having to deal with post-closing disputes and the strain they place on ongoing relationships where the seller remains involved in the business is reduced.

An important caveat to these seller benefits is that they can be significantly undermined if the insurer is allowed to pay the buyer’s claim and then pursue the seller by subrogation. As such, sellers and their counsel often insist on reviewing and approving the RWI policy’s non-subrogation provisions, even where the buyer is the one obtaining the policy. In a typical buyer-side RWI policy, insurers often agree that, except in narrowly defined circumstances such as actual fraud by the seller, the insurer will have no right of recourse against the seller after paying a covered claim. However, sellers and their counsel may have to request these non-subrogation provisions if the insurer’s form does not include them by default.

Buyers can also obtain significant advantages from RWI, particularly in competitive auction processes.

  • Enhanced bid competitiveness. Buyers can offer more seller-friendly terms, such as reduced escrows and indemnity caps, without sacrificing protection, making their bids more attractive.
  • Broader and more reliable recovery. RWI policies may provide coverage that exceeds the indemnities a seller would otherwise agree to, both in scope and duration. In addition, buyers gain access to a creditworthy insurer rather than relying on the seller’s post-closing solvency.
  • Facilitation of deals with limited seller indemnity. RWI is especially useful in transactions involving financial sponsors, dispersed shareholders, or distressed sellers who are unwilling or unable to provide robust indemnification.

Both buyers and sellers (and their respective deal counsel) can also benefit from the ways RWI helps bridge gaps on contentious indemnity issues such as caps, baskets, materiality scrapes, sandbagging, and survival periods. In some cases, deals that might otherwise stall over these terms can move forward with RWI.

Impact on purchase agreement terms

The rise of RWI has materially reshaped several core M&A deal terms over the past fifteen years.

  • Decline in escrow holdbacks. One of the most visible changes is the reduction in escrow size and frequency. In RWI-backed deals, escrow amounts have dropped dramatically, often to around 0.5 percent of transaction value, compared to significantly higher levels in non-RWI transactions. More recent data confirms this trend, with indemnification escrows in RWI deals averaging roughly 1 to 2 percent of transaction value.
  • Lower indemnity caps. RWI has also driven down indemnity caps. Sellers in insured deals often negotiate caps in the low single digits as a percentage of transaction value, compared to materially higher caps in traditional deals.
  • Shorter survival periods. Because the insurer provides coverage for a defined period (often several years), sellers frequently negotiate shorter survival periods for representations and warranties.
  • Increased use of “no-survival” structures. In some transactions, sellers provide little or no post-closing indemnity for general representations, with the RWI policy serving as the primary recourse. These “no-survival” deals can streamline negotiations and accelerate closing.

RWI has also affected

  • materiality scrapes (now widely accepted, in part because insurers favor them);
  • sandbagging provisions (less heavily negotiated due to policy exclusions for known breaches); and
  • separate escrows for purchase price adjustments (increasingly common as indemnity escrows decrease).

Overall, RWI has shifted risk allocation away from bilateral negotiation and toward insurance-backed solutions.

RWI pricing

RWI pricing has become more competitive over time. Current premiums typically fall in the range of approximately 2.5 percent to 4 percent of the policy limit (for example, the premium for $10 million in coverage may cost between $250,000 and $400,000), with many U.S. deals clustering around the lower end of that range.

In addition to the premium, buyers should expect an underwriting fee (often $40,000 to $50,000) and coverage limits that are commonly set at 10–15 percent of enterprise value. These costs are usually treated as transaction expenses and are often borne by the buyer, though cost-sharing arrangements are negotiable.

RWI retention and deductible

RWI policies include a retention (similar to a deductible), typically around 1 percent of transaction value. Historically, sellers covered the first half of the retention amount (often through an escrow), with the buyer paying the second half of the retention. However, modern deals increasingly shift the entire retention to the buyer and eliminate seller participation altogether, particularly in competitive auctions or “no-survival” structures.

What kinds of deals are best suited for RWI?

RWI is particularly well-suited for

  • auction processes where buyers seek to differentiate bids;
  • transactions involving private equity sellers requiring a clean exit;
  • deals with numerous or passive shareholders;
  • cross-border transactions with enforcement concerns; and
  • situations where ongoing relationships between buyer and seller are anticipated.

While there is no bright-line rule, RWI is generally more cost-effective for transactions above $20 million to $50 million. Below that range, premiums and underwriting costs may be disproportionate to the benefits, and insurers may be less willing to participate.

Deal factors that may limit RWI usefulness

Despite its advantages, RWI is not appropriate for every transaction.

  • Smaller deal sizes. As noted above, cost considerations can outweigh benefits in lower-value deals.
  • Known risks. RWI typically excludes known issues, making it less useful where diligence reveals material problems.
  • Complex or high-risk industries. For certain risks, such as environmental liabilities or specific regulatory exposures, the insurer may insist on significantly narrowing or excluding certain coverage by including “deemed amendments” in the RWI policy to the representations and warranties contained in the purchase agreement being insured.

Additionally, RWI generally does not cover covenant breaches or purchase price adjustments.

Recent trends in RWI

Over the past five years, RWI costs have come down dramatically from 2021 highs, when premiums often ranged between 4 percent and 5 percent of enterprise value, to premiums as low as 2 percent in 2024. But costs have begun rising again slowly, with 2025 premiums generally hovering in the 2.5 percent to 3.5 percent range as of the end of 2025.

If there is a single development that has most changed the practical use of RWI in the past five years, it may be the increase in the amount and severity of claims being made on RWI policies. Aon said in its 2025 Transaction Solutions Global Claims Study that it handled more than 1,600 global transaction-insurance claims and secured $1.75 billion in recoveries for clients, including more than $1.4 billion in North American R&W recoveries through Q4 2024 and more than $300 million paid in 2024 alone. Euclid said in its 2024 claims study that severe claims were on the rise and that claims experience should become an increasingly important factor in deciding which RWI carrier to use. WTW then said in their 2026 claims report that in 2025 its North American clients recovered more than $150 million, with an average resolved claim payment of about $7.3 million, or roughly half of the applicable policy limit. Aon and WTW also point to the same loss drivers: financial statements, material contracts or customer issues, and compliance-with-laws breaches account for a disproportionate share of serious paid claims.

A further major development is that RWI is no longer confined to classic control acquisitions. In 2025, WTW reported that 2024 brought new coverage options for minority investments and broader use of RWI in distressed and bankruptcy deals. In a separate 2024 note, WTW said some minority investors can now obtain non-prorated coverage on a case-by-case basis, departing from the traditional practice of prorating recovery to the investor’s post-closing equity stake. Additionally, although synthetic W&I insurance remains primarily associated with distressed transactions, it is now also being used in asset-heavy sectors such as energy and in mainstream M&A.

Lastly, and perhaps most durably, deal teams now integrate RWI earlier, with parties thinking about limits, retentions, exclusions, and underwriting timing during diligence scoping and term-sheet negotiations. As the market has matured, RWI has evolved from being a bolt-on policy to being part of the way sophisticated buyers scope diligence, draft agreements, and choose counterparties from the outset.

Conclusion

Representations and warranties insurance has fundamentally reshaped the M&A landscape over the past decade. For those advising clients in M&A transactions involving enterprise values of $20 million or more, RWI is a central tool in modern dealmaking, with implications for drafting, negotiation strategy, and client counseling. Understanding when RWI adds value (and when it does not) is a critical part of delivering effective transactional advice in today’s market. The next chapter in RWI will likely be less about whether the product is available and more about where it is worth using, how it is structured, and which insurers have earned the market’s trust when a claim arrives. ♦

Valerie Sasaki’s 2026 Legislative Session Update

Valerie Sasaki, Samuels Yoelin Kantor LLP

At the beginning of the 2026 regular (short) session, the Oregon Legislature was looking at a budget gap of approximately $750 million. Over the session, the gap decreased, but it never really went away. This was, in part, due to the federal bill HR 1 (One Big Beautiful Bill Act). However, more locally, ongoing angst about the transportation package once again took all the oxygen out of the room. SB1601 moved $218 million from other programs to try and fill the budget hole.

As we’ve seen in the past with SB1507, Oregon disconnected from the Internal Revenue Code in two major ways: it disconnected from bonus depreciation and disconnected from federal treatment of qualified small business stock sales. To their credit, even the legislature knew this was bad. To try to improve the optics on this revenue raiser, the legislature also implemented a $1,000-per-job tax credit for businesses that hire new employees (maximum of 12,500 new jobs). The legislature also increased the percentage of the federal earned income tax credit that Oregonians can take on their returns from 9 percent to 14 percent.

More helpfully, SB1510 extended the preferential tax treatment for owners of pass-through entities to tax years beginning before January 1, 2028 and permits the carryforward of overpayments under this regime to estimated tax payments for those years. It also made commercials eligible for the Film Credit and gave tribal governments more leeway to direct gas tax revenue for sales on tribal lands.

The legislature made a few minor tweaks: HB4052 implemented a new corporate excise tax credit for new Oregon chartered banks that start business between January 1, 2027 and December 31, 2032. HB4130 extended the farm special use assessment to land under agricultural processing facilities. Finally, the legislature did some light housekeeping around who can represent taxpayers at the Oregon Tax Court’s Magistrate Division.

Local governments have been struggling to find funds to provide basic services to their residents. HB4134 increased the transient lodging tax (TLT) from 1.5 percent to 2.75 percent. This will show up on travelers’ invoices as the “nature conservation fee.” HB4148 increases the percentage of the TLT that local governments are able to use for general services.

SB1501 essentially creates a special taxing district and redirects payroll taxes from workers in the Rose Quarter and income taxes from performers who perform there to an Oregon Arena Fund. Talk about a needle to thread—the bill tries to say that Oregonians in general won’t have to pay for this bill, but it also says that the legislature anticipates issuing $365 million in debt to support the construction and renovation project.

Several good ideas went by the wayside, including comprehensive tax reform, an estate tax exemption increase, studying Oregon’s taxation of international income, various proposals to reform the sacred cow that is the kicker, and improve budgeting methodology (which feeds into improving the kicker). I expect we’ll see some of those back in 2027’s long session! ♦

Barrister Banter: Ambyr O’Donnell

The purpose of the series is to bridge the gap between junior and senior business lawyers in Oregon, fostering understanding and camaraderie. For this quarter’s installment, we interviewed Ambyr O’Donnell, M&A and IPO advisor and the winner of the 2025 James B. Castles Leadership Award. Read on to learn how what’s important to Ambyr—tech, ethics, and ringing the bell on Wall Street—has informed her successful career.

  1. Tell me about your path to being a lawyer. What inspired you to pursue this career?

    I started my undergraduate degree as a computer science major and quickly realized I didn’t love living in a computer lab. An advisor pointed out that law fit my interests in policy, history, and international relations. I took the LSAT, applied to law schools, and never looked back. My interest in tech never went away.

  2.  What is your practice area?

    I work with technology companies going through transformational phases: IPOs, M&A, international expansion, and other major growth moments. I’m a general business lawyer focused on corporate law, M&A, IP, and employment law. I work closely with board members, CEOs, founders, and executive teams to structure and drive strategic outcomes for their business.
  3. How long have you been in your current role?

    I’ve spent about fifteen years as a general counsel or chief legal officer after starting in-house right out of law school. Over time, my work has evolved into broader business advisory roles, which I absolutely love.

  4. How have you seen the practice change since you started practicing?

    Lawyers used to do legal research in physical libraries with books and send faxes or letters for written notice. Now so much of what we do is digital and far more efficient, but also less personal. In the last couple years, AI has also changed how I work. I use AI to get smarter faster, synthesize lots of data, create presentations, and simplify complex communications. I learn new things I can do with AI agents every week. I never outsource judgment and I always carefully vet any AI output before it goes to anyone.

  5. What do you wish you had known before you started working as a new lawyer?

    Your career path might not look like everyone else’s. You may not look like the other lawyers in the room. What is important is what you have to contribute. Listen more than you speak, and speak when something needs to be said.

  6. What are your career highlights?

    I’ve always wanted to stand on the platform to ring the bell on Wall Street. In 2021, I had the privilege of doing that at the New York Stock Exchange with my team at our company’s IPO. What made it even better was being able to bring my son, who was in high school at the time, onto the NYSE trading floor.

    Every deal we close for the purchase or sale of a company feels like an important career milestone. None of my career highlights were achieved alone. Business law is a team sport.

  7. What is your favorite part of the job?

    Solving hard problems with smart people and helping companies turn bold ideas into reality. At the end of the day, it’s all about people working toward something meaningful.

  8. What parts of the job do you wish you could outsource to AI?

    Scheduling and expense reports! Oh, and resolving meritless claims. Those can be so distracting and wasteful.

  9. What advice would you give a new business lawyer?

    There are many ways to create a successful career using your law degree. Seek out projects and people doing interesting things early on and put in the time. Many very successful business people started out in law.

    When I was in law school, I read a quote by former Oregon Supreme Court Chief Justice William M. O’Connell, who said: “Without ethics ours is a crass calling.” This is especially true for business law. Choose to work for good people and businesses doing good things. It matters.

  10. What advice would you give a senior lawyer who is charged with mentoring a new lawyer?

    Move past the day-to-day work. Work with the new lawyer to create a vision for what they might want to do (or at least what they could be qualified to do) in a few years. Identify specific skills and experiences they should pursue to advance their career toward their vision.

    Remind new lawyers that it is okay to take risks and support the businesses they advise in taking smart, calculated risks, so long as everything is legal and ethical.

    I had the benefit of working with an incredible mentor early on and it had a very positive impact on my career. ♦

Self-Compassion for Lawyers: Interrupting Stress and Choosing our Path Forward

Bridget Donegan, Oregon Attorney Assistance Program

There is a specific sense of relief that comes when a friend, after hearing us confide an uncomfortable truth about our inner lives, responds with ease: “Well, of course!” “Of course you’re having a hard time sleeping with all that pressure on you!” “Of course you’ve lost your confidence after what they said to you!” “Of course you’re overwhelmed!” When our distress is met with total, untroubled acceptance, a layer of our own trouble melts away. Our friend’s connection and compassion interrupt our inner turmoil and get us back on track, grounded in reality. Yes, the uncomfortable truth is still true and still uncomfortable. But a compassionate, connected perspective gives us a toehold from which we can choose our next step. We can move forward responsibly.

Compassion is a wonderful way we support each other. Directed inward, it is a powerful way we can support ourselves. In a flood of studies over the last twenty years, researchers are confirming what ancient wisdom traditions have long taught: self-compassion does not weaken our resolve or dim our ambitions. Instead, practicing self-compassion helps build resilience, reduce our distress, and increase our motivation. Amid the many demands of our professional lives, self-compassion is a way to relieve some of the internal pressures we may not even realize we add on top of all the stressors we cannot control.

Of course you are stressed!

Some stress is unavoidable, and the varied stressors of law practice are often outside of our control and can sometimes continue day after day without much relief. Depending on the lawyer, work stressors can include short deadlines, unpredictable client needs, high-stakes projects, billable hours pressure, uncertain outcomes, financial or job insecurity, competition for work or clients, office bullying or conflict, and more. We all experience potential stressors differently—you may enjoy being energized by a tight deadline, while your colleagues will find it distressing, and on another day your roles may switch. Given our high expectations for ourselves, the prevalence of potential stressors, and the fact we can always identify someone in a similar role who seems to be thriving, when we experience distress, we tend to believe that we are the problem. In other words, we think we ought to feel fine. We may think, “This is what lawyering is, so I need to be able to handle it without letting it get to me.”

I want to highlight two of the problems with that very common line of thinking. First, once we are feeling the irritability, exhaustion, overwhelm, tension, lack of motivation, etc., the stress response is already happening. We can wish that it was not, but it is irrational to believe we “should” feel differently than we do. We can aspire not to think about work when it is time to sleep, for example, but that is altogether different from thinking it is wrong that the thoughts keep coming.

Second, and relatedly, our intolerance of our stress response is self-defeating. Telling ourselves that we should not feel the way we do only puts more pressure on us: it is stressful to keep thinking that the way we are is wrong.

The upside here, though, is that our stress about our stress is something we can control. The amount of external pressure lawyers are under is real, even if someone else feels it differently than you. Your experience of that pressure is legitimate; it is the way your body knows how to muster ongoing attention and energy for things in your life that matter. Remembering that is a way to interrupt the cycle of feeling unhappy about the way things make us feel. We can offer ourselves a moment of kind acceptance that our stress response (that is, our frustration, tension, worrying, etc.) is an indication not of our weakness, but of our liveliness amid the dynamic pressures of our lives.

The elements of self-compassion

Self-compassion can feel threatening, especially for high performing individuals, because it calls on us, in the words of researcher Dr. Kristin Neff, to “stop judging and evaluating ourselves altogether.” That does not mean lowering our standards. It means accepting ourselves as we are. And studies consistently show that self-compassion improves our resilience through a variety of life challenges.

In her research, Dr. Neff has identified three elements of self-compassion: mindfulness, a balanced awareness of our difficulties, rather than over-identifying with problems; self-kindness, rather than criticism or judgment; and common humanity, understanding our predicament as part of being human, rather than feeling isolated or alienated by our pain. Any time we notice some distress, practicing a bit of compassion toward ourselves can be a helpful relief and reality check.

Mindful attention to your predicament

Compassion is, by definition, responsive. It is a discerning, motivated way of interacting with another upon noticing their suffering. Self-compassion similarly is responsive, but to our own suffering—we must be willing to turn toward our suffering, and not be absorbed into it, to practice self-compassion. Mindfully acknowledging our own suffering means holding a kind of balanced awareness without avoiding or exaggerating our present-moment discomfort. With practice, compassion allows us to see that we can choose the meaning we make of our experience, rather than being carried along or defined by the emotional force of the situation.

As we trend away from balanced awareness, we trend more toward being swept up in our distressful thoughts and feelings. Instead of saying, “I dread going to work,” we say, “I’m an anxious person” or “I can’t hack this.” When a client meeting goes terribly, we start to think, “I’m terrible.” Rather than experiencing our distress from a broader contextual perspective, our discomfort takes on outsized authority, and we begin to believe it indicates a truth about who we are. Sometimes our habit of letting our failings define us prevents us from looking truthfully at our shortcomings; the internal consequences are hard to bear. A more mindful approach notices how terrible we feel, and maybe also notices that we think “I’m terrible,” while also keeping some awareness that those feelings and thoughts will change in time.

Balanced awareness, according to Dr. Neff, “is the pillar on which self-compassion rests,” because it provides the perspective needed to bring caring responsiveness to ourselves when things are not going well. When you notice some stress without grabbing on to it or shoving it down—just seeing it, even for a moment—you are practicing this core component of self-compassion.

Kindness: Being emotionally available when life becomes difficult

Treating ourselves kindly is probably what most immediately comes to mind when we think of self-compassion. If self-criticism and shaming are at one end of a continuum, kindness is on the other. Self-kindness can sound like a simple acknowledgement with a kind tone: “This is hard right now.” “I want this so badly.” “I do not know what to do.” “This hurts.” And also, “What do I need?” “What is there I can do for myself right now?”

The kindness of self-compassion is not self-indulgence; it does not mean “anything goes.” It means moving away from self-condemnation. A lot of us have been conditioned to feel a certain amount of self-protection in being harsh with ourselves, like there is some morality there, or we are proving to ourselves that we know how one ought to behave. Experimenting with kindness toward ourselves reveals, however, that accepting the simple reality of our immediate condition is different from encouraging it in the future. Like the power in naming something, when we kindly acknowledge our distress with a willingness to help, we gain some leverage for dealing with it.

Understanding your common humanity

Finally, when we practice self-compassion, we shift away from our tendency to see our pains and hassles as unique flaws that set us apart from others. That isolating tendency might sound something like, “Everyone else is handling this fine.” “Nobody else is struggling like I am.” “I am too broken to belong here.” “I should be fine.” That feeling of being abnormal leads to feeling disconnected and lonely, exacerbating our suffering. When we practice self-compassion, we remember that life’s challenges, big and small, are inherent to being human, as are our physiological, emotional, and cognitive stress responses.

My experience is that most of us intellectually grasp that nobody is perfect. Everybody fails. But that abstract understanding often feels irrelevant when we are in our own struggles, which are decidedly not “everybody’s”; my struggles are mine and nobody else’s. When I fail, it feels highly specific and textured; it hurts in a particular way, seems to hold a truth personal to me, and is not a tidy, static thing. How could something that specific to me be universal?

The way I understand this component of self-compassion is on two levels. Although there is truth to the deep specificity of our individual experiences, the more we share with and listen to other people, the more we can directly experience our essential similarities; we do relate to each other’s pain. For many of us, that is a lesson we learn over and over again, every time we dare to confide in a trusted, caring person. We are simply more similar, and more deeply so, than we tend to remember.

At the same time, the specific details, histories, and contours of our personal experiences are unique. We cannot know another person’s inner life. But that precisely is the universality of our predicament. That experience of being not perfectly the same is shared by us all. The specificities of my struggle, those edges of my experience that do not quite line up with yours, do not mean that I am alone; those are the essence of our common humanity.

Choosing a path forward

I spent many months as a practicing lawyer living with a hum of vigilance. It felt absolutely essential to maintain a constant background level of tension so I did not miss something important, or so I could catch and fix anything that was missed. To do otherwise felt dangerous.

In my experience in law practice and at the OAAP, such periods of vigilance are not uncommon for lawyers. A small experiment in self-compassion might be worth a try for those of us feeling that anxious hum now. We can notice the hum and the tension. And then notice whatever comes next. Perhaps consider what help you might offer yourself, including talking to someone else or asking for help.

One of the greatest benefits of practicing self-compassion is more ready access to mental freedom and flexibility. Constricted thought and rigidness, on the other hand, are some of the risks of holding tight to our vigilance. When we stop straining against our own experiences, we tend to find that the pressure releases. Dropping that struggle, seeing our natural responses as the ongoing unfolding of life that they are, opens up a significant amount of space for choice. How do you want to approach your day? ♦

Winter 2026 CFIUS Update

Kassim Ferris, Miller Nash LLP

The Committee on Foreign Investment in the United States (CFIUS) has expanded its reach and impact over the past few years through jurisdictional expansion, increased penalties, stable funding, and dedicated enforcement and monitoring teams, while weathering staff turnover and growing pains. A more detailed summary of CFIUS’s powers and procedures was previously published in the September 2023 issue of Oregon Business Lawyer. In light of CFIUS’s expanded reach and heightened scrutiny, it is increasingly essential for attorneys who handle M&A, financing, and real estate transactions to know how to spot potential national security risk issues for a proposed transaction and when to call in a CFIUS specialist.

CFIUS is an inter-agency committee led by the U.S. Department of the Treasury and is empowered to investigate national security implications of foreign investments in U.S. businesses and acquisitions of certain U.S. real estate. CFIUS can impose mitigation measures and make recommendations to the President of the United States to prohibit transactions. Presidential action is not reviewable by the courts, and recent administrations have increasingly exercised these powers against perceived threats, especially those involving Chinese investors and buyers. Consequently, many prospective foreign investors in U.S. businesses have become acutely concerned about CFIUS issues. CFIUS diligence and clearance are gating issues in many transactions and require technical expertise and knowledge of complex CFIUS regulations and committee practices.

A filing with CFIUS is mandatory for certain non-passive foreign investments in “TID U.S. Businesses”: those that deal with critical technologies, critical infrastructure, or sensitive personal data. CFIUS has the power to impose penalties of up to the value of the transaction against each party that fails to file when mandatory. For all other transactions, filing with CFIUS is voluntary, but if CFIUS is not formally notified, it retains jurisdiction to investigate foreign investment transactions at any time, including after a transaction has been completed. Foreign buyers who have failed to notify CFIUS have later found themselves forced to divest U.S. operations and real estate when foreign ownership was deemed to present national security issues.

It is a common misconception that CFIUS is only an issue for large transactions. In fact, there is no size or value threshold, and CFIUS has blocked many small transactions and forced the divestiture of several small businesses (such as Emcore and MineOne) to address national security threats or vulnerabilities, including vulnerabilities that may not have been apparent or present at the time of the transaction.

Another pitfall is to assume that a particular buyer or investor is not a foreign person. U.S. domiciled entities that are directly or indirectly controlled by foreign nationals, companies, and/or governmental bodies are considered foreign persons subject to CFIUS scrutiny. And the regulatory definition of control for the purpose of CFIUS jurisdiction is broader than conventional notions of control in the corporate context. When a seller of a TID business is unable to verify the ultimate buyer’s or investor’s ownership or nationality, including for significant minority investors, then care is warranted to mitigate the unresolved risk of violating mandatory CFIUS filing requirements. In many cases this may mean demanding that the buyer or investor either join in making a filing with CFIUS or give fundamental CFIUS representations and warranties and accept strong indemnity obligations with an extended survival period.

In reviewing a transaction, CFIUS assesses evidence of the vulnerabilities of the target U.S. business in terms of susceptibility to impairment of national security, the threat posed by the foreign acquirer or related foreign persons, and the potential consequences to national security that could reasonably result from exploitation of the vulnerabilities by the threat actor. Accordingly, assessing the activities of the U.S. business and identifying the investor/buyer and its direct and indirect owners are important first steps in CFIUS diligence.

Several recent developments and CFIUS actions summarized below illustrate these principles.

Expanded jurisdiction over real estate transactions

In 2018, Congress expanded CFIUS’s jurisdiction to include the acquisition or lease by, or concession to, a foreign person of covered real estate near certain military sites and within significant ports and airports. Since then, CFIUS has continued to extend its reach through regulatory changes. The most recent changes occurred in late 2024, when CFIUS added sixty military sites to the list. The scope of covered real estate now includes 227 military sites, including sixty-four for which real estate within an extended range of one hundred miles is subject to review. Covered real estate also includes offshore training complexes (including the entire coast of Oregon and Washington) and missile fields in Colorado, Montana, Nebraska, North Dakota, and Wyoming. Nearly 30 percent of the American West is now considered covered real estate, as illustrated in the map below.

 

A CFIUS filing is not mandatory for a real estate transaction not involving a U.S. business. However, in at least one instance, a real estate acquisition provided the only jurisdictional hook for CFIUS action that resulted in a presidential prohibition and forced divestiture:

In May 2024, President Biden issued an order retroactively prohibiting the purchase of real estate near Cheyenne, Wyoming, by MineOne, a cryptocurrency mining company allegedly majority-owned by Chinese nationals with ties to the Chinese Communist Party or state-owned entities. By the time CFIUS was tipped off, MineOne had built a cryptocurrency mining facility on the property. The property was located within one mile of Warren Air Force Base, the home of the strategic command for all U.S. Air Force intercontinental ballistic missiles. It was also located across the street from a Microsoft data center handling some defense work and near a National Science Foundation supercomputing center. The order included a requirement to remove all improvements and equipment from the property. Some observers noted that the cryptocurrency mining equipment, which was made in China, not only raised concerns about surveillance but allegedly included back doors that could allow a threat actor to remotely and suddenly shut down the equipment and destabilize the power grid—potentially affecting critical national defense capabilities. Notably, if this greenfield project had been built in the adjacent vacant lot just one thousand feet further from Warren AFB, then CFIUS might not have had jurisdiction.

Enhanced penalties for noncompliance

Penalties for noncompliance with CFIUS laws and regulations also increased in late 2024. In particular, penalties for material misstatements and omissions in a submission to CFIUS were increased to a maximum of $5 million per occurrence, up from $250,000. CFIUS also established penalties for violations of a mitigation agreement—of up to the greater of $5 million, the transaction value, or the current value of the interest in the U.S. business or real estate.

The tenor of these changes is reflected in CFIUS’s announcement of several significant penalty actions over the past few years, including a $60 million fine against T-Mobile for violation of a national security agreement relating to a proposed merger with Sprint. T-Mobile allegedly failed to prevent access to sensitive data or to promptly report the unauthorized access to CFIUS.

In less egregious cases, and in cases involving first-time offenses or other mitigating factors, instead of pursuing monetary penalties CFIUS may issue a Determination of Noncompliance Transmittal (DON’T) Letter pursuant to a relatively new practice of the committee. While these letters do not result in penalties or enforcement action, CFIUS’s enforcement policy states that a DON’T Letter can be an aggravating factor in future enforcement action.

Increased funding, staffing, and enforcement capabilities

CFIUS’s mission is supported by stabilized funding, including through government appropriations and collection of filing fees of up to $300,000, imposed on a sliding scale based on the size of the transaction. Program budgets increased from $42.2 million in FY 2024 to $45.2 million in FY 2025, with about $21 million expected to come from filing fees annually. CFIUS has seen several changes in leadership and senior staff over the last three years while also growing its bench. According to program budget summaries, CFIUS now has about 110 full-time equivalent (FTE) employees. At the same time, filings have decreased, from a high of 440 filings in FY 2022 to 325 filings in FY 2024 (the last period for which data is available as of the writing of this article). Despite an increase in resources and decrease in filings, the challenges posed by staff turnover and the change in administration in early 2025 have led to delays in processing and occasional inconsistencies in mitigation and enforcement actions.

CFIUS has also sharpened its enforcement capabilities by establishing a dedicated non‑notified team that scrutinizes transactions for which the parties did not notify the committee. CFIUS now has the power to require parties to provide information needed to determine whether a transaction is covered, whether it raises national security concerns, and whether it triggers a mandatory filing requirement. This has enabled CFIUS to proactively identify and investigate more transactions that might otherwise escape review, particularly those involving foreign investors from countries of concern.

A good example of enforcement action by CFIUS on a non-notified transaction is the January 2, 2026, presidential order requiring HieFo Corporation to divest its indium-phosphide wafer fabrication business. Indium-phosphide semiconductors are critical technology that provides high-speed, high-frequency capabilities for applications such as fiber optic communications, 5G/6G transmitters, and satellite communications. HieFo acquired the business in 2024 from its former parent, EMCORE Corporation, for only $2.9 million. In the order, President Trump claimed that HieFo was controlled by a Chinese citizen and that there was credible evidence the acquisition could threaten U.S. national security. A CFIUS press release cited a risk of diversion of the supply of indium-phosphide chips. HieFo’s founders included its CEO, Dr. Genzao Zhang, who received his PhD from the University of Ottawa, Canada in 1991 and had previously worked at EMCORE in Alhambra, California for twenty years, most recently as its vice president of engineering.

The order against HieFo highlights the U.S. government’s suspicion of Chinese owners and its continued suppression of exports to China of advanced semiconductor technology and other sensitive technologies, such as supercomputers, AI chips, 6G technology, and quantum computing technologies. Enforcement actions like this can be expected to continue, resulting in ongoing fragmentation of global supply chains.

America First investment policy directive

On February 21, 2025, President Trump issued a memo regarding his America First Investment Policy. The memo largely reiterated existing policies and practices of CFIUS and other agencies but did focus on framing economic security as national security. Much of the memo is devoted to emphasizing the importance of protecting U.S. technology, businesses, and resources from the People’s Republic of China (PRC) and restricting outbound U.S. investment in Chinese companies involved in sensitive technology sectors or areas implicated by the PRC’s military-civil fusion strategy—topics already addressed by CFIUS and various other regulatory powers. Among other things, the memo included directives to:

  • ease restrictions on foreign investors “in proportion to their verifiable distance and independence from the predatory investment and technology-acquisition practices of the PRC and other foreign adversaries . . .,” and
  • create a “fast-track” process to facilitate foreign investment in the U.S. from allies, subject to requirements to avoid partnering with foreign adversaries.

In response, CFIUS announced in May 2025 that it is developing a Known Investor Program (KIP) seeking to increase efficiencies by collecting information from eligible foreign investors in advance of a CFIUS filing. Think of it as a sort of TSA PreCheck program for foreign investment. Frequent flyers will still need to walk through the metal detector, but at least they may get through security a bit faster. A pilot of the KIP was slated to run in late 2025 with a small number of selected investors. CFIUS recently solicited input from the public via a Request for Information (RFI) in anticipation of a broader rollout. The RFI suggests the KIP is likely to have strict eligibility criteria and will only be available to foreign investors that have made at least three CFIUS filings within the preceding three years.

New outbound investment security program

One other development tangentially related to CFIUS is the U.S. Treasury Department’s issuance of final rules, effective January 2, 2025, implementing the Outbound Investment Security Program (OISP) pursuant to Executive Order 14105. Under the OISP regulations, U.S. persons are prohibited from engaging in certain investments and joint venture transactions involving persons of “countries of concern” (currently, only China, including Hong Kong and Macau) that operate in certain technology sectors. Targeted sectors currently include semiconductor technologies, microelectronics, quantum information technologies, and artificial intelligence. The regulations include specific technical thresholds for prohibited transactions. For certain other outbound investments in the targeted sectors, a notification is required under the OISP regulations. Unlike the CFIUS regime, the OISP regulations do not require the Treasury Department to review or respond to a mandatory notification. And the Treasury Department has so far declined to provide advisory opinions or guidance on the scope of prohibited transactions, so U.S. persons investing in China and in businesses operated by persons with ties to China would be wise to take a conservative approach when interpreting the scope of the OISP’s prohibitions and notification requirements.

Applicable penalties are established in the OISP regulations pursuant to the International Emergency Economic Powers Act (IEEPA) and include civil penalties of $377,700 or up to twice the amount of the transaction. Willful violations are subject to criminal fines of up to $1 million and up to twenty years in prison upon conviction.

A statutory framework for the OISP was recently included in the National Defense Authorization Act for Fiscal Year 2026 (Pub. L. 199-60 at Sec. 8521). It expands the scope of targeted sectors to include high-performance computing and hypersonic systems, while defining certain limited exceptions to the scope of covered transactions. It also authorizes, but does not require, the Secretary of the Treasury to prohibit U.S. persons from knowingly engaging in covered transactions in prohibited technologies. The Secretary of the Treasury has until March 15, 2027, to issue implementing regulations.

Conclusion

Foreign investments can raise U.S. national security issues deserving of careful attention. Failure to submit a CFIUS filing, when mandatory, can subject all transaction parties to harsh penalties.  Regardless of whether a filing is mandatory, when a filing is not made, CFIUS retains the power to force the divestiture of a U.S. business or real estate even after a foreign investment or acquisition has concluded. Assessing the activities of the target business to determine whether it qualifies as a TID U.S. Business, and identifying the investor/buyer and its direct and indirect ownership, are important first steps in evaluating whether a CFIUS filing is mandatory or warranted for a proposed transaction.

Several other countries have CFIUS-like regimes. Also, new outbound investment security regulations prohibit covered investments by U.S. persons in certain sensitive high-tech businesses in the semiconductor, microelectronics, quantum computing, and AI sectors operating in China or controlled by persons with ties to China. Certain other covered outbound investment transactions in these same sectors that are not outright prohibited now require a notification to the U.S. Department of the Treasury.

As the U.S. government continues to sharpen its scrutiny of foreign investments, it is increasingly essential for deal parties and their counsel to begin their diligence on potential national security issues early to avoid big problems and hefty penalties. ♦

Beyond the Hype: What We Know So Far About the Value of AI Tools for Lawyers

Jennifer Ballard, Good Journey Consulting

In November 2025, Stephen Embry of Above the Law issued a wake-up call to outside counsel: in-house lawyers are increasingly using AI tools and experiencing efficiency gains, and it is only a matter of time before they require the same from their outside lawyers.

However, identifying one or more AI tools that will be the best fit for law practice is a daunting task. There are hundreds of AI tools for lawyers crowding the market, and there is significant hype surrounding the AI industry in general. Fortunately, there are a growing number of independent efforts to evaluate the real-world utility of AI tools for lawyers. These studies offer some data about AI tools at fixed points in time that can be used to make better informed decisions about AI tool selection.

Independent evaluations of AI tools for lawyers

Below are summaries of seven such independent studies, which individually and collectively reveal helpful insights into where it may (or may not) currently be worthwhile to integrate AI tools with your practice.

Contract drafting study 

A September 2025 contract drafting study from Legalbenchmarks.ai, a collaboration between legal professionals, AI experts, and researchers, evaluated 13 AI tools (seven legal industry AI tools and six general-purpose AI tools) against a human baseline that consisted of in-house commercial lawyers with an average of 10 years of working experience. The legal industry AI tools included in the study were August, Brackets, GC AI, InstaSpace, SimpleDocs, Wordsmith, and an anonymous tool, while the general-purpose tools were ChatGPT, Claude, Copilot, Gemini, Le Chat, and Qwen. The study found that some AI tools outperformed the human baseline in producing reliable first drafts of contracts. The study did not find a meaningful difference in the output reliability or output usefulness between the general-purpose and legal industry AI tools. The top performing tools for output were Gemini, ChatGPT, GC AI, Brackets, August, and SimpleDocs. The study concluded that while the legal industry AI tools were not outperforming general-purpose AI tools on output, they were beginning to differentiate themselves with workflow and support functionalities for lawyers, such as integrating with Microsoft Word, and offering clause libraries and templates. The most meaningful differentiator the study found among the legal industry AI tools was whether the tool integrated with existing workflow and technology. For workflow integration or support, the top performers were Brackets, GC AI, and SimpleDocs. You can read this study here.

Information extraction study 

The second study from Legalbenchmarks.ai, released in April 2025, focused on information extraction tasks for in-house lawyers. This study evaluated six AI tools, including two legal industry AI tools: GC AI and Vecflow’s Oliver, as well as two general-purpose AI assistant tools: Google’s Notebook LM and Microsoft Copilot, and two general-purpose LLM chatbots: DeepSeek and ChatGPT. All of the AI tools were scored on both accuracy and usefulness. The study found that the two legal-industry AI tools, GC AI and Oliver, received the highest combined scores, concluding that while general-purpose AI tools could match legal industry AI tools in accuracy, the legal industry AI tools delivered more value in usability and workflow integration. You can read this study here.

Vals Legal AI Report

In February 2025, Vals AI, a platform that seeks to advance generative AI with independent and scalable evaluation infrastructure, released the Vals Legal AI Report (VLAIR), which evaluated four legal industry AI tools (CoCounsel, Harvey Assistant, Oliver, and Vincent AI) and compared the results to a lawyer control group. The tools were evaluated across up to seven tasks commonly performed by lawyers (each company could opt into as many of the task evaluations as desired). One or more AI tools beat the lawyer control group on four tasks (document extraction, document question-answering, document summarization, and transcript analysis), while the lawyer control group surpassed the AI tools on two tasks (redlining and EDGAR research) and matched the highest performing tool on one task (chronology generation). Harvey Assistant, which participated in six of the seven tasks, had the strongest performance, receiving the top score on five tasks and the second-place score on one task, and beating or matching the lawyer control group in five tasks. This study can be accessed here.

VLAIR—Legal Research

In October 2025, Vals AI released an extension of VLAIR focusing on legal research. VLAIR—Legal Research evaluated three legal industry AI tools (Alexi, Counsel Stack, and Midpage), as well as ChatGPT and a human baseline of lawyers from one law firm who were all experienced in conducting legal research. The study involved 200 legal research questions. The AI tools and the lawyer baseline were each given a weighted score, with 50% of the score given to accuracy, while 40% was given to authoritativeness, meaning whether the response was supported by citations to proper sources, and 10% of the score was given to appropriateness, meaning whether the response was easily understood and could be shared as-is with others. The study found that the legal industry AI tools received the highest weighted scores, ranging from 76% to 78%, followed by ChatGPT at 74%, with the lawyer baseline scoring the lowest at 69%. Counsel Stack had the highest score of the legal industry AI tools.

Notably, the study found that when the AI tools outperformed the lawyer baseline, they did so by a large margin. Of the 200 questions included in the study, AI tools outperformed the lawyer baseline on 150 of the questions, and the average point margin was 31%.  In contrast, when the lawyer baseline outperformed the AI tools, it was by an average point margin of 9%, and typically involved questions concerning complex multi-jurisdictional analysis, judgment-based synthesis, or when a deeper understanding of context was necessary. You can read this study in its entirety here.

Vals AI LegalBench contributions 

In 2023, researchers created a benchmark called LegalBench, which included 162 legal reasoning tasks evaluated across 20 large language models (LLMs). Benchmarks are datasets and tasks that have been standardized to measure the capabilities of an AI model across an industry. Vals AI contributed to the LegalBench benchmark with a December 2025 update, which evaluated 92 AI models on legal tasks, finding that the top performing AI models were: (1) Gemini 3 Pro (87.04% accuracy), (2) Gemini 3 Flash (86.86% accuracy), and (3) GPT 5 (86.02% accuracy). You can read more about Vals AI’s contribution to LegalBench here.

Law student study 

The University of Minnesota published a study in March 2025 called AI-Powered Lawyering: AI Reasoning Models, Retrieval Augmented Generation, and the Future of Legal Practice. In this study, law students tested Vincent AI, a legal industry AI tool that was refined using retrieval augmented generation (RAG) and OpenAI’s o1-preview, an AI reasoning model, on six legal tasks, finding that one or both AI tools significantly enhanced the quality of the legal work compared to the legal work performed without AI in five out of six tasks: (1) drafting an email for a client, (2) drafting a legal memo for a partner, (3) analyzing a complaint and drafting a written analysis, (4) drafting a motion to consolidate, and (5) drafting a persuasive letter. Additionally, the study found that both AI tools significantly boosted productivity in the same five out of six legal tasks, with particular strength in tasks like analyzing complaints and drafting persuasive letters. Neither tool demonstrated improvement in quality or efficiency for the sixth task, drafting a non-disclosure agreement. The study noted that it was the only task where participants were provided a general template to use in their response, which may have reduced the potential for AI-driven quality improvement. You can read this study in its entirety here.

Legal research hallucination study 

Stanford RegLab published a preprint study in May 2024 called, Hallucination-Free? Assessing the Reliability of Leading AI Legal Research Tools. This study tested OpenAI’s GPT-4 along with three legal industry AI tools refined with RAG: Westlaw’s AI-Assisted Research, Ask Practical Law AI (both Thomson Reuters products), and Lexis+ AI, concluding that all four tools hallucinate. The hallucination rates of the RAG-tuned AI tools tested in the study were reduced compared to GPT-4 (which it found hallucinated 43% of the time) yet remained substantial. The study found that Westlaw’s AI-Assisted Research hallucinated one-third of the time, while Ask Practical Law AI and Lexis+ AI produced hallucinations in more than one of every six responses. LexisNexis and Thomson Reuters both responded that their internal testing and customer feedback demonstrated higher rates of accuracy than the study results, with Thomson Reuters asserting an accuracy rate of approximately 90% for their AI-Assisted Research tool. While the results of this study are already dated given the recent swift progression of AI developments, the Stanford study identified that the most important takeaway of its results was that the legal industry needs thorough and transparent benchmarks and evaluations of AI tools. This study can be accessed here.

What insights do these studies collectively provide?  

When these studies are considered collectively, it becomes evident that lawyers should not summarily dismiss AI tools. Several independent studies have now concluded that using an AI tool to perform certain tasks may elevate a lawyer’s work through improved quality and/or efficiency. Tasks that were found by the studies to benefit from the use of an AI tool included contract drafting, document extraction, document question-answering, document summarization, transcript analysis, drafting emails and letters, drafting complaints, analyzing complaints, drafting motions, and some legal research tasks.

In contrast, tasks where AI tools did not add value within the parameters of the studies included redlining, EDGAR research, and chronology generation. While the Minnesota law student study did not find added value in using AI tools to draft a non-disclosure agreement when the students were provided a general template to use in their response, lawyers can compare this finding to the more recent Legalbenchmarks.ai contract drafting study finding that some AI tools outperformed the human baseline of commercial lawyers with 10 years of experience in producing reliable first drafts of contracts. Additionally, lawyers can consider testing one or more AI tools for contract drafting to draw their own conclusions.

Over time, the findings from these studies can also be used to evaluate how AI tools are evolving. For example, when the findings of Vals AI’s LegalBench contributions are compared to the Stanford hallucination study, it appears that the accuracy of OpenAI’s GPT AI models has improved significantly since May 2024 (December 2025: 86.02% accuracy, May 2024: 57% accuracy). This is notable in part because many legal industry AI tools use OpenAI’s models and their competitors’ models as their underlying infrastructure.

Some of the studies concluded that it is a toss-up whether you can presently get better output from a general-purpose AI tool or a legal industry AI tool. Further, some of the studies note that legal industry AI tools are distinguishing themselves from the general-purpose AI models by offering better workflow integration and support. Additionally, lawyers should know that some legal industry AI tools may offer more data privacy and security advantages than consumer-grade general-purpose AI tools.

What else should lawyers consider when evaluating AI tool options?

Lawyers should be prepared to distinguish between independent studies, such as the ones discussed above, and in-house evaluations by the companies making AI tools for lawyers. Some AI tool studies are conducted by AI companies themselves and publicized for marketing purposes. While an AI tool company’s evaluations of its own product may provide useful data, it’s important to be mindful of the source of any data utilized for decision-making purposes.

Additionally, while the studies highlighted above have yielded helpful insights, the evaluations conducted to date have only assessed the tip of the iceberg. There are many uses for AI in legal practice and hundreds of AI tools for lawyers that have not been independently evaluated. This means that lawyers who will evaluate AI tool solutions beyond the tools and tasks included in the studies covered in this article should be prepared to do their own testing to determine if an AI tool is a good match for their organization.

Finally, AI tool selection should not begin and end with considering the AI tool options available. Instead, lawyers should start the AI tool selection process by gaining an understanding of the many possible uses that AI tools currently offer and prioritizing the technology issues experienced by their organizations. AI tools for legal research command significant attention in the legal industry, yet many lawyers have not taken time to consider whether legal research is really the highest priority technology issue that their organization needs to address with an AI tool.

Once a lawyer has clarity about where improved technology solutions are most needed in their unique practice, the information in this article becomes most useful, and better-informed decisions can be made about which AI tools deserve further consideration. Further evaluation of an AI tool prior to final selection may include testing the AI tool to assess its real-world performance and should always include a risk assessment of the AI tool’s data privacy and security policies to confirm alignment with a lawyer’s professional responsibilities. ♦

Want to learn more about AI tools for lawyers? Through June 30, 2026, use the code BIZ60 for $60 off Jennifer Ballard’s “How to Pick the Best AI Tools for Your Law Practice” CLE. Learn more here.

Barrister Banter: Daniel Gilbert

The purpose of the Barrister Banter series is to bridge the gap between junior and senior business lawyers in Oregon, fostering understanding and camaraderie. For this quarter’s installment, we interviewed Daniel Gilbert, Senior Assistant Attorney General for the Oregon Department of Justice. Read on to learn how Daniel’s cross-country law experience, from Washington, DC to Oregon, informs his words of wisdom for young lawyers.

  1. Tell me about your path to being a lawyer. What inspired you to pursue this career? 

I have always enjoyed logic and trying to piece together disparate pieces of information into a cohesive narrative. I also loved competing in games (sports and otherwise) and was good at learning esoteric rules and figuring out how to apply them when doing so would give me a competitive advantage. Law seemed like a good fit.

  1. What is your practice area?

I am a government lawyer, serving as a Senior Assistant Attorney General in the General Counsel Division of the Oregon Department of Justice. In this role, I provide legal advice to numerous state agencies as they seek to carry out the duties assigned to them by the Oregon Legislature.

  1. How long have you been in your current role?

I have been in my current position for a little more than two years and an attorney with the State of Oregon for about thirteen years.

  1. How have you seen the practice change since you started practicing?

Client expectations around response times and attorney availability have increased significantly. There is also an increased desire to use quantifiable metrics to evaluate attorney performance.

  1. What do you wish you had known before you started working as a new lawyer?

Three things. First, that you are in charge of your own career. It is critical for a young attorney to constantly step back, evaluate their career to date, and decide if they like the path they are on or if changes are necessary. Any organization, including law firms, defaults to using their employees in a way that best suits the organization’s needs. A young attorney should continually evaluate and ensure that their career is developing in a way that is conducive to their long-term needs and desires.

Second, I wish I had understood the importance of relationships and of developing a reputation for excellence and good judgment (both internally and with clients). The same piece of legal advice can be treated differently depending on who delivers it and how it is delivered. You will have a happier and more successful career if you become known as a trusted advisor who understands the clients’ needs and gives great legal advice that is tailored to those needs.

Third, keep an open mind with respect to career opportunities. When I started my career, I “knew” that I wanted to do international law. And I spent the first seven years of my career doing so while working at a large firm in Washington, DC with a practice that focused on investment treaty arbitration and representing foreign sovereigns before U.S. federal courts. But life brought me to Oregon, and I have ultimately been much happier working for state government than I was doing what I thought was my dream job.

  1. What are your career highlights?

My career highlights involve successfully guiding clients through unsettled areas of the law. As a government attorney, one highlight was successfully advising the Oregon Legislature as it sought to retain the ability to conduct redistricting when (due to the COVID-19 pandemic) the Legislature would not receive the federal census data required to conduct redistricting before the deadline for state legislative reapportionment that is set forth in the Oregon Constitution.

  1. What is your favorite part of the job?

My favorite part of the job is the number of novel issues I am asked to analyze and provide legal advice on. I have worked in state government for almost thirteen years, and it feels like nearly every week I am presented with a new circumstance to figure out.

  1. What parts of the job do you wish you could outsource to AI?

Basic legal research/case law summaries.

  1. What advice would you give a new business lawyer?

Work hard, develop a reputation for producing excellent work, and remember that professional relationships matter.

  1. What advice would you give a senior lawyer who is charged with mentoring a new lawyer?

Take the responsibility seriously. This means taking the time to get to know the new lawyer as a person and trying to figure out what they actually want to accomplish in their legal career. Advice is much more helpful when the recipient feels understood. ♦

Why Transactional Attorneys Should Care About Client Estate Plans

Natalie E. Smith, Sussman Shank LLP

Business owners often reach out to their attorneys during times of growth (to structure a new endeavor, facilitate a transaction, or finance an expansion) and during times of despair (to avoid a bankruptcy or navigate a lawsuit). Rarely do business owners reach out to discuss how a possible untimely death may impact their business. That is why it is essential for business attorneys to ask the right questions to ensure that each client’s business ownership and succession plan is fully integrated and consistent with their estate planning. Taking this crucial, extra step will add value and give your clients additional peace of mind.

They had an estate plan? Oh no!

Every good corporate attorney advises their closely held business clients to establish a shareholders’ agreement, which can cover things like voting, management, and succession planning. The same applies to an operating agreement for a limited liability company or a partnership agreement for a partnership. Most shareholders want to keep control of the business with the remaining shareholders if a shareholder retires, dies, or becomes disabled. Therefore, it is common for a shareholders’ agreement to obligate the estate of a deceased shareholder to sell that person’s shares to the corporation or to the remaining shareholders.

But what happens when a deceased shareholder’s estate plan disposes of the deceased shareholder’s shares in a different way, such as to their surviving spouse or their children? Whether the shareholders’ agreement or the deceased shareholder’s estate plan governs the decision depends on the details, but the disconnect between the two could have been avoided if the corporate attorney had asked about each shareholder’s existing estate plans. A corporate attorney could point out when a proposed transfer at death would not be permitted (or desirable) under the business and succession plan and work with a shareholder to ensure the totality of their planning is consistent.

Other issues arise when there is no open communication between the transactional attorney and their business client. Imagine that you assist with forming a limited liability company among four members, the purpose of which is to own and rent out apartment complexes (“Rent, LLC”). Rent, LLC is member-managed, and all of the members enjoy participating in the management of the business. The business is thriving and is operating smoothly with each member being involved in Rent, LLC’s management. Two years later, one of the four members dies. At that time, you discover that the deceased member had established a joint revocable trust (“Family Trust”) with her spouse—but the membership interest in Rent, LLC was held in her name, individually, not titled to the Family Trust. What happens?

A probate or simple estate proceeding would be required so that someone would have legal authority with respect to the deceased member’s interest in Rent, LLC. While a probate may be initiated immediately after death, a simple estate proceeding may not be initiated sooner than thirty days after the date of death; notwithstanding, both a probate and a simple estate proceeding require a four-month creditor claim period during which the assets are restricted. Overall, it would be unusual to administer an estate in less than six months from date of death, and during the administration, the decedent’s membership in Rent, LLC would be subject to court oversight and intervention, which could hinder the company’s management and operations. Because Rent, LLC is member-managed, the personal representative or affiant of the decedent’s estate would need to sign (or vote) as a member for each action of Rent, LLC requiring member approval. Further, the personal representative or affiant may even need court approval to take certain actions, such as approving the sale of Rent, LLC.

Additionally, the personal representative or affiant would have to work with the other members of Rent, LLC (potentially in court) to navigate the operating agreement’s terms that govern with respect to the deceased member’s interest in Rent, LLC. Court intervention would be necessary if the terms of the operating agreement contradict the dispositive provisions of the deceased member’s Will, which presumably directs transfer of the decedent’s membership interest to the Family Trust and administration for the beneficiaries of the Family Trust (what is often referred to as a “pour-over will”).

Asking your client if they have an estate plan can prevent these types of delays and conflicts. Additionally, once you know your client’s estate plan, you can help them get the most value out of it by ensuring that their business assets are properly titled and that their expectations match the reality reflected in their business and estate planning documents. This can be accomplished by discussing—often in excruciating detail—what they want to happen to their business operations when they die or become incapacitated and what would be required for the continued success of their business.

Have you seen Succession (on HBO Max)? Well, we need to talk…

It can be difficult to discuss business succession with clients, as it requires discussing their retirement, possible incapacity, and inevitable death—topics people often struggle facing head-on. When approaching this discussion with clients, it is important to have a roadmap that keeps you on track so that you hit on key topics rather than saying “So, what’s next?” Guiding your clients through this conversation will make it easier for them to discuss these topics and will also create a clear succession plan that can then be mirrored in their estate plan.

For some clients, succession planning will be straightforward. For others, it can be extremely complex. Succession planning can touch on many sensitive subjects, such as upsetting family dynamics, difficult business partners, and long-time employees. Sometimes succession means no succession and winding up; sometimes it means selling the business and distributing out all assets or net sales proceeds. Other times, succession means leaving the business in the hands of key employees who are not currently owners. In this situation, it is essential that the corporate attorney is in contact with the estate planning attorney to ensure that the dispositive provisions of the owner’s estate plan match their intended succession plan. It is often best to prepare a detailed shareholders’ agreement, operating agreement, or partnership agreement (depending on the form of entity), to which the intended successor owners will be bound. The owner’s estate plan must also require that the named fiduciaries (agent under a durable general power of attorney, trustee under a trust, and/or personal representative or affiant under a will) be bound to the terms of that agreement.

Often clients plan to leave their business—or the economic benefits of their business—to their surviving spouse and children, or to other family members who they hope will either continue their legacy or otherwise benefit from what they built during their lifetime. While this may seem straightforward, it is crucial to discuss the details. For example, let’s say Tammy owns nine hundred shares in Timber Tammy, Inc., an Oregon corporation (“Timber”), and her children Tara and Timothy each own fifty shares of Timber. You have been Timber’s corporate attorney since Tammy founded Timber more than thirty years ago. Timber is a successful timber harvesting and logging business located in Oregon, which supplies high quality wood products to vendors throughout the Pacific Northwest.

You schedule a meeting with Tammy to discuss business succession. To start the meeting, you outline the current ownership of Timber and ask about the children’s involvement. You learn that Tara is excelling in the business and has become VP of Operations. Tammy is working with Tara daily and teaching her the ins and outs of Timber. Tara’s older brother, Timothy, does not enjoy the “business” side of Timber, but loves being in the field, where he works closely with many of Timber’s employees and supervises the timber harvesting.

For Tammy, the business succession of Timber may seem clear—her two children will each receive one-half of the shares in Timber and run the business together. However, there are a few important questions you should ask: (1) When does Tammy want to retire from Timber? (2) Does Tammy intend to own all her shares in Timber until she dies? (3) Will her children own equal shares in Timber on her retirement and/or death? (4) Do her children want to co-own and together operate Timber after Tammy’s retirement and/or death? (The older sibling does physical work, and the younger sibling is in the office, so their expectations and timelines may dramatically differ.) (5) Does Tammy have an estate plan that generally benefits her two children equally; does it specifically address the transfer of her shares in Timber on her death?

Tammy responds as follows: (1) She wants to retire in seven years. (2) She thinks she wants to maintain ownership of her shares in Timber after retirement, but she is not sure exactly what the benefits and consequences of that would mean. (3) She wants Tara to own a controlling interest in Timber since she will be running the business and Timothy will be boots-on-the-ground. (4) Yes, both Tara and Timothy plan to own and operate Timber for at least the next ten to fifteen years. (5) Yes, she does have an estate plan, and she “doesn’t know what it says!”

After requesting copies of Tammy’s estate planning documents, you learn that she has a grantor revocable trust (“Trust”), which owns only 500 of her 900 shares in Timber. It directs that 350 shares be distributed to Timothy and 150 shares be distributed to Tara, in trust for life. Finally, Timothy is named as a business trustee with respect to all of Tammy’s shares in Timber (which presents issues, as only 500 of Tammy’s 900 shares are titled to the Trust, so Timothy cannot act as Business Trustee with respect to those remaining 400 shares without some form of court intervention).

You realize that Tammy’s current estate plan does not address her full ownership in Timber and is not aligned with her stated business succession goals. These differences can easily be resolved but do need to be addressed. Tammy’s full nine hundred shares of Timber should be titled to the Trust (not in her individual name). The Trust should be amended and restated to change the dispositive provisions so that, on Tammy’s death, all of her shares in Timber (whether it be nine hundred shares or some different amount, because Tammy may have more shares issued or some shares redeemed during her remaining lifetime as part of her retirement planning) be distributed 51 percent to Tara and 49 percent to Timothy. Tara should be named as the Business Trustee so that she would manage the shares of Timber (and make pertinent shareholder decisions) under the Trust’s administration.

If you hadn’t asked Tammy these questions, her goals with respect to Timber’s succession would have been thwarted by her own estate plan. Further, her existing estate plan could have caused tension between her two children. For Tammy, your questions provide value and give her the opportunity to update her planning.

Tax savings? Say more.

Tammy is so thankful for your thoroughness and advice that she sets up a joint meeting with you and her estate planning attorney. At that meeting the three of you discuss her goals with respect to Timber and updates to be made to her estate plan. Together, the three of you realize that Tammy’s shares of Timber and their disposition after her death will likely qualify for the Natural Resource Property Exemption under ORS 118.145. Under this exemption, up to $15 million of the value of a decedent’s interest in natural resource property is exempt from Oregon estate tax. Timber owns qualifying natural resource property located in the state of Oregon, and Tammy intends to maintain ownership of Timber (as Trustee of her Trust, which is a revocable grantor trust) until her death (especially since she now knows this could reduce her Oregon taxable estate by an additional $15 million). Because Tammy has always intended for her children to take over the business after her death, and her children desire to do so, this exemption is a valuable savings to Tammy and her children.

Assuming Tammy’s estate is able to take full advantage of the natural resource property exemption (in addition to the standard $1 million Oregon state estate tax exemption amount), you would have assisted her estate in saving approximately $2,062,500 in Oregon estate taxes. These savings may not have been achieved had you not met with Tammy with the goal of fully integrating her business succession plan and her estate plan.

What we can learn from Tammy’s story is that corporate and transactional attorneys have a great opportunity to add value to their work by keeping estate planning considerations in mind. Corporate and transactional attorneys need not become experts in estate planning or tax to assist their clients in these areas. Engaging local counsel to work through these matters with your clients will save them time, money, and heartache in the future by ensuring that their assets are properly distributed after their death in accordance with their wishes. ♦