PROFESSIONAL LIABILITY FUND

I SRI MALPRACTICE AVOIDANCE NEWSLETTER FOR OREGON LAWYERS

Issue No. 73 NOVEMBER 1998

OFFICE SYSTEMS IN THE YEAR 2000 ...

IS YOUR FIRM READY?

In a recent survey, 82 percent of small business­es were found to be at risk for year 2000 compliance problems. Only 17 percent had investigated the issue at all. While most lawyers and law firm administra­tors have heard of the bug and some have replaced antiquated computer equipment, most are far from prepared. Firms of all sizes should take steps now to ensure that all office systems will function properly in the 21st century. This article identifies potential problem areas , offers solutions, and outlines resources to help you get started today.

WHAT IS TI-IE MILLENNIUM BUG?

Date codes in most computers are programmed to process only two digits for the field representing the year. When the year 2000 arrives, the two-digit fields will revert to 'OO'-in effect not recognizing any dates after the year 1999. As descri bed by year 2000 guru Alan M. Gahtan, date recognition is fundamen­tal to the operation of most information systems. This makes the consequences of the year 2000 bug signif­icant. Systems may delete data, overwrite preexisting files, generate incorrect or inconsistent results or shut down altogether. It is estimated that as many as

IN THIS ISSUE Office Systems in The Year 2000 ....... 1

Actions You Should Take ............ 8

The Statute of Limitations for Year 2000 Claims .............. 10

On the Lighter Side ................ 10

Free CLE Tapes and Practice Aids from th� PLF ............ . . . (inserts)

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80 percent of law firm personal computers now in use are not year 2000 compliant.

FAX MACHINES, VOICE MAIL AND OTHER

EQUIPMENT ARE VULNERABLE

Any device, piece of equipment or appliance with date-dependent computerized components is potentially vulnerable. This may include fax machines, photocopiers, cost-recovery or disburse­ment capture systems, telephone and voice mail sys­tems, postage meters, dictation equipment, environ­mental systems, building access systems, security systems, elevators and even automobiles. The ID@st prudent approach is to investigate all such sy stems for compliance. (See our checklist on page 3.)

DO YOU EXCHANGE DATA WITH CLIENTS,

LAW F IRMS, OR OTHERS?

If you have satisfied yourself that your firm is year 2000 compliant, don't be too quick to breathe a sigh of relief. Your new computer system can be "contaminated" when you exchange data with others. Talk to clients, other firms, vendors-anyone with whom you share data on a regular basis-to verify their year 2000 compliance.

As this article goes to press, the year 2000 seems

far away. In truth, the date errors caused by the

Millennium could start surfacing in just a few

months time. system which tracks future dates tickling, accounting, etc.) could

producing erroneous results as early as 1999. Take

steps now to tackle the Millennium Bug. The lead time

involved in selecting, purchasing, installing, customiz­

ing and training lawyers and staff on new equipment is

substantial. Lawyers who procrastinate may find it dif­

ficult to locate qualified computer consultants and tech­

nicians. If you need a technology consultant, visit

Microsoft's website: www.microsoft.com/smallbiz/

consultant/default.htm. Clients have many law firms

from which to choose. If they are concerned about

Y2K compliance and learn you have done little or

nothing about it, they may choose to go elsewhere.

IF THE WORST HAPPENS?

What if the systems in your office fail to recog­

nize the year 2000? How will this date recognition

problem affect your everyday activities?

If your system malfunctions, it is likely that:

Long-term docket dates will be lost or miscalcu­

lated.

Tickle dates will be lost.

• Deadlines will be missed, resulting in mal­

practice claims.

• Database or spreadsheet programs which sort by

date will return error messages or incorrect

results.

• Your accounting program will be unable to pro­

duce accurate payroll checks and other disburse­

ments.

• Client bills will be delayed as you reconstruct

lost time and billing data.

Some software programs will stop working alto­

gether, rendering data entered in these programs

useless.

E-mail messages may be lost or misdated.

Documents will have incorrect dates.

• Miscellaneous files may be deleted.

•

•

•

•

•

•

•

•

EXAMPLES OF LONG-TERM DOCKET

DATES THAT MAY BE AFFECTED BY

THE YEAR 2000 PROBLEM

Statutes of limitation

Tort claim notice deadlines

Lease expirations

Contract expirations

Judgment and lien certificate renewals

UCC filings

Patent/Trademark/Copyright dates

Annual corporate maintenance (meetings,

minutes, etc.)

Courtesy reminders to clients about review­

ing wills or other legal documents

Internal administrative reminders (for exam­

ple, reminders to renew firm insurance poli­

cies, renew office leases, or to review client

files for microfilming or other storage).

You will be unable to access or reprogram your

voice mail.

Your fax will go on the fritz, or if it works, the

date and time stamping function won't.

If your copier has date-dependent computerized

components, you won't be able to make copies of

documents for your files or your clients.

• Forms, checklists and other documents created in

your old DOS word processing program may be

inaccessible. common belief is the

Millennium Bug won't affect word processing.

This may prove to be fatal if taken for granted'.

All word processing programs, including

WordPerfect 5.1 for DOS, automatically create

date-dependent temporary files each time they

are launched. These temporary files could over­

write or interfere with forms, checklists, or other

documents previously saved on your hard drive.

(See the software chart on pages 6 and 7 of this

issue.)

Is this list intimidating? Is the problem too big

for the typical law firm to solve? Thankfully, no.

While it's tempting to take a cue from the ostrich and

Page 2 BRIEF NOVEMBER 1998

the will go away, the good news is that

you can take steps now to protect yourself from

lerns related to the year 2000 (Y2K).

In some ways, ensuring that your computer sys­

tem is year 2000 compliant is one of the easier tasks

you can undertake (assuming you haven't invested

substantial resources in developing custom soft­

ware). Upgrading hardware and software or obtain­

ing a "fix" from your software and hardware manu­

facturers is a relatively straightforward process.

Reviewing other systems for year 2000 compliance,

and analyzing other areas of vulnerability or poten­

tial liability, is trickier. The checklist below is

designed to help guide you through this maze.

Test Your Hardware: If you are net­

worked, temporarily take your computer off the

network. Check the date and time settings to veri­

fy that they are current. Reset the date to

December 31, 1999. Reset the time to 23 :57. Turn

the computer off. Have a cup of coffee. After four

minutes or so, turn your computer back on. Go

into the DOS mode. At the C:> prompt, type

"DATE" in all caps without the quotation marks.

Press the Enter key. Now look at the screen. What

date did your computer display? A PLF employee

who tested her computer this way was quite sur­

prised when the screen read January 4, 1980. No

matter what the result is, run this test twice. Once

with the computer left running (don't shut it off

after you reset the date and time) and again as

described above. You may get inconsistent results.

If you see an incorrect date, you have a problem.

ALERT

DO YOU USE WORDPERFECT 5.1, 6.0, 6.1, WORD 6, OR WORD 7?

A recent search of the Internet has revealed

that these programs may not be year 2000 com­

pliant. Steps should be taken immediately to

upgrade these word processing programs. Tests

indicate that files may be lost after the year

2000, and some features of these programs may

no longer be reliable.

NOVEMBER 1998

•

EXAMPLES OF THE PROBLEM

If you have a tickler system on your comput­er and you enter a 2-year statute of limitations to begin on December 10, 1998, will the com­puter calculate the time limitation correctly in the year 2000? It will be expensive if the year is entered as 1901, 1980, or some other inac­curate year.

If you have a computer program that amor­tizes loan payments, the program may not correctly figure due dates for loan payments

past December 1999.

Computer programs that check validity of

insurance policies may incorrectly read the

lapse date for policies that lapse after

December 1999.

Data bases that sort information by age may misread data. For example, an individual on social security who was born in 1929 may find that his or her social security benefits

stop if the computer miscalculates the per­son's age in the year 2000. This would occur if the computer interpreted 2000 as 1900 and tried to subtract 1929 from 1900, or calcu­lated the age as 51 years old because the computer interpreted 00 as 1980 (1980-

1929). Either of these events could result in the computer rejecting the claim as invalid.

Expect to have problems if you are still running

a 286. With old and new hardware, the major

problem is BIOS, the software that allows your

operating system to communicate with your

hardware. Recent tests have shown that 79 per­

cent of BIOS chips manufactured before 1997" '

do not roll over to the year 2000. The chances

are high that if your computer is a " pre- 1996"

model, it is not Y2K compliant. If you're a Mac

user, you should be safe. According to Apple,

Mac computers are compliant. Your Mac-com­

patible software carries no similar assurances.

Check with vendors and/or manufacturers and

upgrade as needed. (For more about manufac­

turer representations, see Jeff Duncan Brecht's

article, The Millennium which appeared in

the July 1998 issue of the Oregon State Bar Bulletin. )

Page 3

Check Your Computer Network: If your firm is currently using a Novell network, you will proba­bly experience date and time inaccuracies among workstations. This may cause problems with doc­ument management, indexing and e-maiL Novell has issued a patch for NetWare 3.12 and is sched­uled to cure problems with NetWare 4.x, Intranet Ware and GroupWise by the end of 1998. The company has not, however, announced any plans to issue a patch for NetWare 3.11. If you're using NetWare 3.11, plan on upgrading. Microsoft rep­resents Windows NT to be year 2000 compliant.

WEBSITES/RESOURCES

The following sites provide general Y2K information�

http: //www.year2000 .com <

http: //kode.net/-ggirod/bookmark.html

http://www.mitre.org:80/research/y2k

http://.pw2.netcom.com/-helliott/OO,htm

http://www.compaq . com/year2000

http://www.lawyersweekly.com

http://y2k.das . state.or. us

The following sites provide definitions of

compliance:

Federal Acquisition Regulation Final Rules on

Year 2000 Compliance

http://www. comlinks.com/gov/farf897 ;htm

Information Technology Association

http://www.itaa. org/farcomments.htm

General Services Administration

http://www.itpo!icy.gsa.gov/mks/yr2000/ contlang.htm

New York State Year 2000 Warranty Standard

http://www.ir m .state.ny.us/yr2000/contract.htm

IBM

http ://wwwyr2k.raleigh .ibm .com/spec . html

The Institute of Electrical and Electronic

Engineers (IEEE) "draft standard for Year 2000 terminology" (Standard 2000.1), can be

purchased for $36 by calling 1-800-678-4333�

Page 4

Vour Computer System:

Problems will most likely occur in computers using DOS or a pre-95 version of Windows. As the date changes to 2000, some computers run­ning DOS will automatically reset to January 1, 1980 or January 1 1984. Windows 3.1 or 3.11 may reset the computer to January 1, 1900. Windows 98 is represented by Microsoft to be year 2000 compliant. Windows 95 users will need to download a service patch and take other appropriate steps. (See the software chart on pages 6 and 7 of this issue.)

Evaluate Computer Software and Online

Search Services: Pre-1996 versions of any pro­gram are suspect if programmers didn't consider the effect of Y2K when writing the underlying code. Contact software manufacturers about fixes or upgrades. (See the discussion below about license agreements and refer to the software chart on pages 6 and 7 of this issue.)

Software is available to help you test your com­puter. Inspectl2000 by Unitech Systems, Inc. and Compuware's File-AID/Data Ager are just two of the products on the market designed to help you diagnose or simulate year 2000 problems. For a list of vendors, check out the website for Beyond

Computing: http://www. beyondcomputingmag .com. Diagnostic software may also be down­loaded from these sites:

http://www.RighTime.com http://www.sbhs.com/y2k/index.htm

http://www.rigel.co.nz

If you subscribe to CD-ROM servic�s or online search services, contact suppliers about Y2K compliance.

Check Software K .... "n .. lrll't-r Into The Office

Individuals: This includes screens avers. Introduction of non-compliant software of any

kind may affect a network or personal computer. Consider adopting a firm-wide policy prohibiting unauthorized installation of software on worksta­tions or laptops.

• Look Over Vour License Agreements: Take an inventory of your computer hardware, software, CD-Rom services, and on-line search services. Locate the licensing agreements and other con­tracts that go along with the products, and analyze them for representations, warranties, and any lia­bility limitations related to year 2000 issues.

B RI EF NOVEMBER 1998

Consider contacting your vendors and requesting that they make the products year 2000 compliant. Failure to take this step may be considered a waiver of your right to reimbursement for dam­ages. The manufacturer may have fixes or upgrades to offer.

Check Other and Electronic

Devices: In addition to reviewing and upgrading your computer system, do a firm-wide inventory of all technology currently in use. Any device or piece of equipment that incorporates micro­processors or embedded logic is vulnerable to the year 2000 bug. Contact vendors and/or man­ufacturers if in doubt. Get written reassurances. If you have licensing agreements, maintenance

lease agreements, or other agree­ments, check to see who is responsible for fixing non-compliant systems.

YEAR 2000 TIPS FROM MICROSOFT

To reduce the potential for errors or unex­pected results, Microsoft recommends the fol­lowing:

Update all applications with date fields that do not accept 2000 and beyond.

• Set your computer to display all 4 digits of a year as the default so users are aware of pos­sible errors as dates are entered. *

• Check the impact of BIOS problems on older systems. (Try the date test described on page 3 of this issue.)

Convert all years stored as 2 digits to 4 dig­its, confirming the accuracy of the conver­sion.

Establish a consistent date format using all 4 digits of a year for exchanging dates between internal or external systems.

Update systems to take advantage of new "ease of use" functions for dates into the next century.

*In Windows 95, go to the Control Panel and select

Regional Settings, then the Date tab. Change the

"Short date style /I to display all four digits of a year

(M/d/yyyy), which will cause all applications to dis­

play dates in the 4-digit format as a default.

NOVEMBER 1998

OREGON STATE BAR Y2K CLE

On Friday, November 20, 1998, the Oregon State Bar will present The Millennium Bug:

Protecting Your Clients and Yourself from the

Year 2000 Computer Problem at the Oregon Convention Center in Portland. The program qualifies for 4 MCLE credits and 1 ethics credit. For additional information, contact the OSB CLE Registration and Order Desk 503-684-7413 or 1-800-452-8260, ext. 413.

Review Your Insurance Policies: Review all of your insurance policies including property, casu­alty, liability, eriors and and fiducia­ry. If your policy does not cover losses related to year 2000 issues, you may still have time to pur­chase applicable coverage.

Contact Key Vendors and Suppliers: If you are ready for the year 2000, are your vendors and key suppliers? You may want to contact your bank, payroll service, bookkeeper, CPA firm, landlord, utilities, local and long distance tele­phone carriers, and any other vendors who pro­vide key services to your firm. If necessary, obtain compliance agreements.

• Respond Carefully to Client Inquiries: Oregon law firms are already receiving inquiries from corporate clients about year 2000 compliance. Frame your responses to these inquiries carefully. Your ability to provide service will depend on your systems, and on the systems of suppliers, vendors� and contractors you use. Although you may want to please and impress a client� don't provide unequivocal assurances. The best approach is to describe what you have done to be prepared.

• Watch for Malpractice Traps: There are many potential malpractice traps related to failure to properly advise clients on year 2000 risks. Mergers and acquisitions, disclosure statements in annual reports, acquisition of equipment and services are just a few of the potential problem areas. (See Jeff Duncan Brecht's article, The

Millennium Bug, which appeared in the July 1998 issue of the Oregon State Bar Bulletin and watch the In Brief for future articles on this aspect of Y2K.)

Page 5

Make A Contingency Plan: Don't rely solely on

data entered in your computer, even if you

believe it to be year 2000 compliant. Keep a hard

copy backup of critical information:

Document key deadlines and tickle dates in

client files.

Use hard copy intake forms, checklists and

tickle logs to back up computerized data.

Print out computerized docket and tickler

entries.

Maintain a desk calendar in addition to your

computerized docket and/or calendar.

Keep a paper trail documenting all data,

including time and billing.

Beverly Michaelis

Practice Management Advisor

Professional Liability Fund

The PLF practice management advisors are available to assist firms with these and other office systems issues. For assistance, contact the PLF at 800-452-1639 or 503-639-6911.

FILES PILED IDGH ...

ON THE FLOOR? Call for free and confidential office systems assistance.

Professional Liability Fund .. Carol Wi Ison it Dee Crocker • Beverly Michaelis

Practice Management Advisors

639-6911 or

1-800-452 .. 1639

Page 6 , BRIEF

The PLF contacted the mam

Product Name

Abacus Plus (DOS, Windows)

Amicus (Windows, Mac)

Billing Software for Attorneys (Windows)

CaseMaster(Tabs/ProfitSource (�OS, Windows)

CLAS (DOS; some fTlodules available in Windows or with Windows interface)

Conft ictSearch

Software Manufacturer

Abacus Data SySI

Gavel & Gown

Juno Corporation·

Software Technoll

Softlaw Corporati

Tremco Legal Sol

Gryphon (Windows) The Poseidon Gn

HotDocs (DOS, Windows) Capsoft Oevelopr

MS-DOS 6.22 Microsoft

OnTime (DOS, Windows) The OnTime GrOt

PC Law Jr. (DOS, Windows) Alumni Computer

Quicken/QuickBooks (DOS, Windows, Mac) Intuit

Sidekick (DOS, Windows)

Time Matters (DOS, Windows)

TimesJips (DOS,Windows, Mac)

Trial De Novo (Windows, Mac)

Windows 3.1, 3.11, Windows 95

Windows 98

WordPerfect 5.1 for DOS, 6.0 for DOS or 6.1 for Windows

WordPerfect 7 or 8 for Windows

Word 2.x, S.x, (DOS, Windows, Mac)

Word 6 or Word 7 (Word 95) for Windows

Word 97 for Windows

Starfish So·,

Data.TXT Corp on

Timeslips Corp or.

De Novo System!

Microsoft

Microsoft

Corel

Corel

Microsoft

Microsoft

Microsoft

1The PLF makes no warranties as to the accuracy or thoroughness I .;I ! use or contemplated for purchase. Such a review might include contactin� updates or patches from manufacturers, and testing products as applicabh the default on your computer's control panel to a four-digit year, failure to d

NOVEMBER 1998