Ethos Business Law

In an article published last week in Forbes, some experts have declared that deal-making is back, citing some large recent transactions:

• Dell’s $3.9 billion acquisition of Perot Systems in September
• Walt Disney’s $4 billion tie-up with Marvel in August
• Exxon Mobil’s $41 billion all-stock buy of XTO Energy in December
• AIG offloading its Asian life insurance business to the U.K.’s Prudential for $35.5 billion

While these deals certainly make headlines, I don’t think they do much for main street American business and more importantly, I don’t think you can declare that merger and acquisition activity is back based on these deals alone. (more…)

A recent article in the American Bar Association Journal highlights a trend in business legal services:  The Outside General Counsel.  This “trend” is nothing new to Ethos Business Law — it is the basis of our business model — our “Ethos!”  Outside general counsel services, or fractionalized general counsel, are growing in popularity as business owners realize the value they can leverage from proactive, business-focused attorneys that have in-house experience, business education and law firm training.  But how do these services work and why are they better? (more…)

If you have ever been to Minnesota, or better yet lived there, you have probably experienced “Minnesota Nice.”  Typically, Minnesota Nice is characterized by polite friendliness, an aversion to confrontation, a tendency toward understatement, a disinclination to make a fuss or stand out, emotional restraint or self-deprecation.  What happens when Minnesota Nice enters the negotiating room?  Often times, it can lead to difficult or failed negotiations.

Unfortunately, Minnesota Nice isn’t really about being “nice” at all. It’s more about keeping up appearances and avoiding confrontation.  Moreover, it can also be used as a negotiation tool, which causes confusion, misunderstanding and frustration among other participants.  So, what do you do when you are in a negotiation and you are confronted with “Minnesota Nice?”  Here are a few tips: (more…)

I recently saw this article in Larry Bodine’s blog.  It is a great discussion on how attorneys can be more client-centric and service-oriented by adopting a different business model. It has long been my philosophy that attorneys must constantly redefine ways to create and add value to their clients.  There are certainly better ways of measuring value than the number of hours spent on tasks.

I find one of the best way for a client to leverage value from its corporate counsel is through regular, proactive interaction.  Simply spending time discussing a client’s business and future goals can prove quite productive.  I often work as outside general counsel for clients on a retainer basis — not by hourly fees.  This encourages clients to spend time working with their attorney on proactive strategies and removes the “time” concern.  Moreover, this fosters a better relationship between the parties and allows the attorney to have a better institutional knowledge of the client.  If you are still paying for every minute of your corporate attorney’s time, consider implementing a different business model.

As the end of the year fast approaches, our thoughts turn to holiday cheer and family fun!  However, it is also important to think about a few simple pieces of annual corporate maintenance to protect you and your company.  Two important and often overlooked items include filing the annual registration for your company and holding your annual meetings. (more…)

According to a recent article from the Wall Street Journal, some new cases have begun to erode the long-standing view that personal emails sent from a work computer can be monitored by employers.

In the past, most courts have treated corporate computers, and anything on them, as company property. However, in recent rulings, courts have begun to investigate the circumstances around disclosure of policies to employees and other factors. For example:

• In New Jersey, an appeals court ruled that an employee of a home health-care company had a reasonable expectation that email sent on a personal account wouldn’t be read.
• In San Francisco, a federal appeals court ruled that employers that contract with an outside business to transmit text messages can’t read them unless the worker agrees.

While it is probably too early to make any sweeping generalizations about this trend, it certainly suggests that employers need to review their policies, practices and training to make sure they do not run afoul of this evolving issue.

Recently, the New York Times posted a story on the new FTC regulations that as of December 1, 2009, require bloggers who review products to disclose any connection with advertisers, including receipt of free products or payment in any way.  In advancing this rule, the FTC stated that this practice frequently occurs and can be deceiving to the public.

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We have all been there — shouting, grand-standing and lines in the sand.  Unfortunately, when a negotiation turns hostile, the client suffers.  A missed opportunity, dead deal, lost capital or worse.  All can be results of negotiations gone bad.  I have found that interest-based negotiation can often prevent hostile negotiations and even turn a hostile negotiation more productive.

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In a recent article from Law.com, an industry observer stated “[a]lternative fee arrangements are like teenage sex. There’s a lot more people talking about it than doing it—and those that are doing it don’t really know what they’re doing. . . .”  While yes, that is a juicy, headline-attracting quote, I tend to agree with it wholeheartedly.

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Recently, I was working with a client looking at a potential investment.  As I was pouring over the diligence, I noticed some interesting and unfortunate trends.  By using quick and simple ratio analysis, I was able to determine that the business was not as healthy as initially thought, nor as the sellers portrayed.  A few simple calculations saved my client significant purchase price dollars and buyer’s remorse once they acquired a business in serious trouble.

I think it is important that all business people (including lawyers) be able to understand, digest and interpret basic financial statements.  If you are not familiar, I have set forth below a few key financial ratios that you can use to assess the financial health of a business: (more…)