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Gender discrimination in Silicon Valley and the Startup and VC Industry!

Gender discrimination may be more prevalent in Silicon Valley, the Startup and VC culture than most realize.  The reality is that most partners, VCs and Startup CEOs are men.  The Ellen Pao trial has brought these issues to light, but … Continue reading

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The art of Negotiating Commercial Agreements and Making Sure You manage Legal Risk without Pissing off your Customer or Partner!

Negotiating commercial agreements requires a certain combination of preparation, skill, art, anticipation, guess work and sometimes just dumb luck to ensure that you are able to come to terms that are satisfactory to both sides.  If you push too hard and you ask for too much, then you are likely to meet stiff resistance and encounter more obstacles to working out a deal or reaching an agreement.   Preparation is key in this respect, know the industry, know what is standard, know what you do not know, know the other side’s hot buttons and concerns, know your bottom line and know your risk tolerance, and lastly be creative–not everything has to be the same as it was before.

There are many ways to negotiate around and draft around concerns that both parties have.  Foster an atmosphere of frank and open discussion about the issues that both sides are trying to manage.  Understand when the other side is making a reasonable request.  Make sure you are not being unreasonable, but do not be afraid to ask for what you want.   A good negotiator and a contract draft can usually find a way to appease both sides.   However, if the parties are not willing to discussing business points and openly air their concerns, then it is hard to identify the business driver for the negotiations.  In this case, it is really hard for both sides to come to terms and agreement, because neither, sides are discussing the real obstacle to the deal.

While it is true that sometimes you may be able to get what you want, because the other party is lacking in sophistication, the reality is that anyone can play hide the ball or withhold information.  It doesn’t take a genius to recognize when the other side is not being forthcoming or is being less than candid with you.   Thus, it inherently leads to a scenario where the other side reacts and conducts him, her or itself in the same manner.  Often times, the sophisticated party doesn’t realize that they have fell for the oldest trick in the book.  No matter what concerns or risks you are trying to manage the more frank and candid you are the more likely that you are to bridge the gap and come to an agreement.

Often times, concerns surround legal ease or boiler plate that is outdated and unenforceable.  In fact, sometimes the more you overreach the less protection the law and contract interpretation principles will award you.  Many times, I have advised clients to just not worry about something that is unenforceable, but being a litigator it makes it easier for me to know what will work and withstand scrutiny by a Court.   It is often better to just leave overreaching language in a contract, because you know it will give you grounds to invalidate the contract.   However, there is a bit of art involved in this, because the language has to be interpreted by a court in the manner that you would like it to render it unenforceable.

I always suggest that if somebody is playing hardball take on hardball posture and allow them to feel like they have the upper hand and are getting some very tough language to protect their interests, but then pick certain issues that truly are risks that need to be managed and you can discuss frankly.   In fact, you may get more than you should in certain areas, because the other party believe it has gotten everything it wants in areas that are truly not a concern for you.   However, this requires careful preparation and a nuanced understanding of the law, the industry, and the clients risk tolerance.

If you have any concerns or questions about negotiating a commercial agreement, acquisition, divestiture, sale of your business or the purchase of your business, then please do not hesitate to contact us at http://www.corporateacquisitionattorney.com

Employment Discrimination and Harassment Claims and Punitive Damages!

Many employers, plaintiffs, and their attorneys will be interested in a recent Ruling in the Crittenden v. Cook County Commission on Human Rights Ruling relating to punitive damages.  A former employee sued for discrimination and sexual harassment under the Cook County Human Rights Ordinance and the Illinois Human Rights Act.

The Cook County Human Rights Commission (CCHRC) ruled in favor of the former employee and awarded lost wages, compensatory damages, punitive damages, costs, and attorneys’ fees.  However, the Employer appealed the award of punitive damages.  The Employer asserted that the Cook County Human Rights Ordinance (CCHRO) and the Illinois Human Rights Act (IHRA) do not explicitly authorize the CCHRC to award punitive damages.

Although it has long been understood that Title VII allows punitive damages, but with caps or limits based on the number of employees; there is no such analogous provision under the CCHRO or the IHRA.  Thus, the Plaintiff or employee had to make a common law based claim for punitive damages.  However, the CCHRC does not have such common law powers.  The CCHRC’s administrative authority does not include the inherent common law powers of circuit or district court judges.

Consequently, the Employer was able to have the award of punitive damages stricken. If you have any concerns or questions, then please contact a Chicago business, corporate, or employment law attorney.

To find out more go to:  Crittenden Opinion

How to grow your business and manage business and legal risks? How to make your business more attractive to Investors?

One of the most practical ways that a business owner can grow his or her business and make it more attractive to investors is by creating an operations and/or process manual.   This provides a method of creating knowledge transfer between the owner, employees, and anyone else that may be working for you.   It is also a ready source of trade secrets and training materials for new employees.   If you can write down what you know, then you have to spend less time revising it to improve on your processes, training replacement employees, identify potential areas of further research and development to develop additional products or services.

After you have taken the time to create an operations plan you can use it to tweak your business plan and corporate strategy.  For example, are there processes that are prone to increase risk of liability, if so, then you can think about creating a subsidiary or another company to use to shield the less risky aspects of your business.   Maybe, a general commercial liability or products liability insurance policy will effectively help you manage the risk of liability.  The operations manual can be used to train new employees and protect against the risk of losing your employees to your competitors.  Maybe, you are growing at a rate that exposes you to federal and state employment statutes, and it makes sense in investing in a good employment manual and human resource training program.

Moreover, once you have written down your operations manual not only can you identify areas of innovation, but also potential areas for developing your intellectual property portfolio.  The Operations Manual can be the start of an IP development strategy to help create barriers to entry and increase the value of your business.  You can develop not only trade secrets, but patents, trademarks, trade dress, and copyrights.  In addition, you can identify customers that are generating a large portion of your revenues and try to cater to their need for your products or services.  You can identify the traits of these customers that will allow you to find other similar customers to whom you can pitch your product or services.

These customers may also be good sources for strategic alliances and partnerships or some form long term supply or services agreements.   Once, you identify who they are you can also develop product or service bundles and/or add on products or services.  However, if you have not created a method of tracking who your customers are, then you cannot scale your business.   If you have any concerns or questions about your business or corporate planning, then feel free to contact us.