1. Avoid Disputes: Read the Contract and Get The Deal in Writing.

One of the major principals of contract law is that a contract cannot be formed without “a meeting of the minds.”  This means that both parties must have a common understanding regarding the major terms of the deal. Business owners will have to deal with contract matters in the ordinary course of their business, whether the contract is with the business’ employees or with a manufacturer or supplier of goods.  It is important, not only to read the entire contract, but to understand the terms of the contract.  Doing so will allow the owner to know exactly what he or she is agreeing to, and such knowledge can help prevent the business owner from entering into a deal that may not be good for the business.  It will also ensure that the business owner will get exactly what he or she really wants because they can bargain to strike certain terms or add new terms.

On the other side of the coin, it is critical for business owners to put their deals in writing.  This will help keep disputes over the terms of the deal to a minimum, because those terms will in writing.  While oral contracts can be enforced in the court of law, their existence can be difficult to prove.  Even if the court accepts that an oral contract existed, there will still be an argument over the terms of the contract.  Putting the terms of the contract down on paper will allow a business owner to avoid the mess of proving the existence and terms of a contract to the court of law.  It will also increase the likelihood that the court will find the business owner has an enforceable agreement.

2. Give Structure to Your Business: Incorporate or Become a LLC.

Starting a business can be exciting, but it can also very risky.  One of the ways new business owners can protect themselves is by organizing their business in the form of a corporation or limited liability company (“LLC”).  Though there are other types of entities available to business owners, Corporations and LLC’s are the most popular forms of entity because they provide the business owner(s) (or shareholder(s)) the protection of limited liability.  The limited liability protection means that the corporation (or LLC) is treated as if it was its own person that is legally responsible for its own actions and debts.  Any debt or liability incurred by the entity is not passed down to the owner or shareholder (except in the case of piercing, which will be discussed later); instead, it remains solely with the corporation or LLC.  Creditors of the corporation or LLC will not be able to reach the personal property of the owner(s) or shareholder(s) to satisfy the outstanding debt.  They can only seek satisfaction of the debt through the repossession and sale of entity assets.

While the corporation and LLC provide limited liability protection, there are cases the courts have pierced the veil of limited liability protection.  Courts will allow the limited liability veil of a corporation or LLC to be pierced under the following circumstances:

1)    Where the members have comingled personal assets with that of the corporation (“alter-ego theory”);

2)    Where permitting the entity to keep its limited liability veil would allow fraud or other injustice to occur;

3)    Where the entity is undercapitalized; and

4)    In the case of corporations, where the members failed to follow corporate formalities.

If a business owner wishes to maintain the limited liability protection afforded to either of the forms of entity discussed above, they must ensure that their entity has sufficient means to cover the entities debts and keep entity assets separate from their own.

3. Protect Your Trade Secrets, Intellectual Property, or Trademarks

If your business has an innovative new product or method of providing services, take the time to file the necessary paperwork to protect your product or method.  The business will be more profitable if its products or methods are the exclusive property of the business.  Not only will protecting your product or method give you a competitive edge, but it will allow you exclusive rights to profit from your idea.  In order to protect your product or method, you must file a patent with the United States Patent & Trademark Office.  It may be necessary to hire an attorney to assist with filling out the necessary paperwork.

Business owners will also want to protect their trademark phrase or symbol.  If the business does not have a trademark phrase or symbol, it can be worthwhile to come up with one.  The trademark will allow easy identification of the business as it grows, and people will come to associate it with the quality of goods or services the business provides.  Not every word or phrase can be protected with a trademark.  Following the three rules below will increase the likelihood that your trademark will receive protection:

1)    Use words or symbols that the business owner or employees created themselves

2)    Use words or symbols that have a common meaning, but their meaning bears no relationship to the good or service; and

3)    Use words or symbols that are suggestive of the good or service.

Once the trademark symbol or phrase is created, the proper paperwork must also be filed with the United States Patent & Trademark Office.  Please keep in mind that generic words, symbols, or phrases are not protectable with a trademark.  Furthermore, a geographical search may be necessary to ensure that other businesses operating in the same area are not using the same trademark words or symbols.  For a deeper explanation of the rules for creating a trademark, please visit this website: http://www.jdsupra.com/post/documentViewer.aspx?fid=2fcf0fa8-3814-4e0e-bf73-272b5647bd7b.

4. Ensure Former Employees Do Not Become Your Competitor

One of the most important provisions of a standard employment contract is the covenant not to compete.  This contract clause ensures that the employee does not become the business owner’s competitor if the employee leaves the business or is terminated.  California courts disfavor covenants not to compete and will rarely enforce them.  However, they will be enforced if they are reasonable in scope, geographic area, and time.

For the clause to be reasonable in scope, it can only restrict the employee from performing jobs or activities that would place him or her in direct competition with the former employer.  For example, a former employee of a burger stand cannot open up a burger or hotdog stand on the corner across the street from the former employer.  However, the former employee could open up a refreshment stand across the street from the former employer because such service does not directly compete with the former employer.

There is no specific rule governing how much time or how big of a geographical area restriction is reasonable.  The court will simply examine these restrictions on a case-by-case circumstance and judge whether they are reasonable within the context of the case.  Generally, the longer the temporal restriction is, the less likely that the restriction is reasonable.  Geographic restrictions will usually be reasonable so long as it is the restricted area is a reasonable estimate for the business’s area of operation.

The covenant not to compete should also contain language that will protect the business’s trade secrets.  Included in the definition of “trade secrets” is the business’s customer contact list.  Protecting the business’s customer list with a covenant not to compete will provide your business grounds to recover damages from the former employee or their subsequent employer if either attempts to solicit your valued customers.

5. Conclusion

Following the tips given above will help your business avoid many of the legal pitfalls that can plague a new small business.  While some of these tips do require the assistance of an attorney, the expenditure should be worthwhile.  The time, money, and effort ensuring that the business is covered from all angles will minimize the need for costly litigation down the road.  The less a business has to spend on litigation, the more it can spend on purchasing capital and creating the jobs America so desperately needs.

The etymology of the word “entrepreneur” is well established. Since the earliest of French times, it has meant “someone who breaks into hives when coming within 20 feet of a lawyer.”

While I’m joking regarding the word’s origins, I’m quite serious (albeit figurative) regarding the entrepreneurial response to lawyers. Most young entrepreneurs see themselves as an unrivaled visionary and the last thing they need is some old dude in a three-piece pulling on the handbrake.

Until something else does.

Nothing will grind the entrepreneurial party train to a halt faster than a big lawsuit, nasty contract dispute or some other legal circus animal that no one bothered to stop from coming on board. The lawyer-averse entrepreneur suddenly finds himself begging for a hug from the old dude.

So, before you need to beg for that hug, here are 10 pitfalls that often cause startups legal trouble. A penny of legal proactivity in each of these areas will offer a pound of protection as your business matures.

1.   Not Hiring a Startup Lawyer: There are a lot of lawyers that represent small businesses, but there are only a few that regularly represent startups–particularly when it comes to fundraising from sophisticated angels and venture capitalists. There is a “market” around angel and VC funding and if your lawyer is not immersed in that market you can get fleeced.

2.   Not Having Founders’ Agreements: How do you split the equity pie? Who contributes what? Who acts as CEO? What if a founder stops performing? There are so many questions that founders never think through because everything is going to be “awesome.” However, when cash and humans are involved, things are seldom uniformly awesome.

3.   Choosing the Wrong Corporate Entity: While this sounds mundane, it is actually quite important. Whether you want to run your business as a C Corp, S Corp, LLC, LP etc. is wholly dependent on your long-term objectives. Different structures offer different opportunities and restrictions, and changing your structure years later is administratively painful and expensive.

4.   Using Someone Else’s Trade Name: Many entrepreneurs will lock on a company name without researching whether someone else owns that name. They will put up a web site, print a bunch of advertising collateral, and then they get a letter from some Malaysian conglomerate that says, “Quit using our name and pay us $1 million in damages.”

5.   Comingling Accounts: When money first starts coming in – either from investors or sales–it is easy to mix personal and business accounts. Don’t do it. The more you do, the more that someone can pursue your personal assets for any unpaid corporate liabilities.

6.   Failing to Protect Intellectual Property: Most great ideas are supported by a product or process that should be patented. If you are telling people all about your idea without a NDA or a patent application on file, you run the risk that your great idea will soon be your competitor’s great idea. Identify your core pieces of intellectual property and patent them.

7.   Failing to Have Adequate Employee Agreements: While these are less extensive than the founders’ agreements, you need at least a standard agreement in place for all of your employees and consultants that covers confidentiality, ownership of things they develop, etc. The agreement will not feel that important early on, but it will come in handy when your first employee is hijacked by a competitor.

8.   Failing to Check for Employee Agreements: If you are hiring someone from a company that has followed step No. 7, failing to investigate their former employee agreements can cause problems – especially if you are hiring them for their technical knowhow. If their “knowhow” is owned by their former employer or is blocked by a non-competition agreement, you may be getting less value than you bargained for.

9.   Failing to Comply with Federal or State Securities Laws: If you are asking even a couple of people for money – whether it is an investment or a loan – you must make sure you are observing the various securities laws. While you may not need to “register” your securities, you may need to file for an “exemption.” An improper offering can lead to regulatory fines and, maybe even worse, unwinding of a transaction.

10. Understand Key Contracts: If a third-party is important to a core part of your business, you need a contract with that party and you need to understand the core terms of that contract. In a breach-of-contract lawsuit, ignorance is not a defense.

Facts: The dispute arose when several members of the Union picketed in front of Food Co., a subsidiary of Ralphs, for being a nonunion store. Ralphs sued for trespass and sought to enjoin the unauthorized picketing after an unsuccessful attempt to require the Union to follow Food Co.’s rules for speech on the property. The rules prohibited, in part, the distribution of literature, physical contact with any person, display of signs larger than two feet by three feet, and speech within 20 feet of the store entrance. Ralphs alleged that the Union didn’t follow the rules ; specifically, that the Union  was handing out flyers and enlisting supporters within five feet of the entrance.

In bringing suit, Ralphs challenged the constitutionality of California’s Moscone Act, which deprived state courts of jurisdiction to issue injunctions against “peaceful picketing or patrolling” involving any labor dispute. Ralph’s lawsuit also challenged California’s Labor Code section 1131.8, which imposed severe restrictions on a property owner’s right to obtain injunctive relief against union activities. The trial court ruled that the Moscone Act was unconstitutional because it constituted content based discrimination in violation of the First Amendment and Equal Protection Clause. The trial court, however, upheld the constitutionality of California’s Labor Code section 1138.1 in light of a prior appellate decision which held that Labor Code section 1138.1 did not violate federal and state constitutional guarantees of equal protection. Applying Labor Code section 1138.1, the trial court denied Ralphs’ motion for a preliminary injunction. Ralphs appealed.

Decision: Three questions of law were at issue on appeal:

1) Is the entrance area of Food Co., where the picketing was taking place, a public or private forum? If public, the California Constitution required that any time, place, and manner restrictions on free speech be reasonable. The court found that Food Co.’s entrance area was not a public forum, so the company was free to restrict the type of speech allowed at its entrance.

2) Is California’s Moscone Act, which limited the ability of courts to issue injunctions in labor relations cases, constitutional? The constitutionality of the Moscone Act was at issue because the Act’s selective restriction was based on the content of the speech. The court held that the Moscone Act was unconstitutional under the First and Fourteenth Amendments because it afforded preferential treatment to speech concerning labor disputes over speech about other issues.

3) Is the requirement of California’s Labor Code section 1138.1 that factual showings be made before a court is able to grant an injunction in a labor dispute constitutional (i.e., that unlawful acts have been threatened and will be committed and that substantial and irreparable injury to the property would result)? The court found that this Labor Code section was unconstitutional for the same reasons as that of the Moscone Act.

Stay Tuned: Although the decision may be subject to further appeal, this case provides important guidance for employers dealing with the issue of regulating union activity on business property. The court’s ruling is seen as a major victory for California retailers who have endured loss of business and damage to their image resulting from union picketing on their properties. A wide spectrum of businesses ranging from hospitals to retail chain stores are expected to be impacted by this decision. Employers need to have a firm grasp of what constitutes public and private forums under California law and be able to determine the types of content neutral restrictions that are enforceable on their premises.

Economists polled by Dow Jones Newswires were expecting GDP to rise by 2.5% in the second quarter. In the first quarter, the economy grew by 3.7%, revised up from an originally reported 2.7% increase. But growth estimates all the way back to the start of 2007 were revised lower.

After suffering its worst downturn since the 1930s, the U.S. economy began taking small steps forward about a year ago, helped by the Federal Reserve’s slashing of lending rates and the government tax cuts. But recent data have raised questions about the recovery’s durability. The job market remains weak, with almost one in 10 Americans unemployed, and growth in consumer spending and manufacturing appears to be slowing down.  The government revision of data over the past three years showed that the economy’s exit from its deep slump was weaker than previously estimated. In the final quarter of 2009, for example, GDP rose at an annualized rate of 5.0% as consumer spending didn’t grow as much as previously thought. The earlier estimate was that GDP increased by 5.6%.

In the most recent quarter available, consumer spending rose by a moderate annualized rate of 1.6% in April to June. Spending by Americans, which accounts for more than two-thirds of the economy, rose by 1.9% in the first three months of the year.  Meantime, business spending on equipment and software continued to surge, increasing by 21.9% in the second quarter, compared with a 20.4% rise in the first three months. The figures highlight the contrast in the economy between high company profits and a persistently feeble jobs market keeping consumers at bay.

Federal Reserve Chairman Ben Bernanke, who last week said the economy’s outlook was “unusually uncertain”, has stressed the strength of the recovery will depend on whether consumers spend and companies invest enough to make up for fading support from the government. With unemployment still at 9.5% and Americans worried that taxes will need to rise to cut a huge budget deficit, that remains in doubt. When they meet Aug. 10, Fed officials are widely expected to repeat they see interest rates staying close to zero for a while and are likely to at least discuss ways in which they could support the economy further. A Fed official Thursday warned that deflation is a growing risk for the economy.

Economic growth in the U.S. during the second quarter slowed to 2.4%, indicating that the recovery has been weaker than previously expected. David Wessel, Dennis Berman and Evan Newmark discuss. Also, Dennis Berman tells the story about one of the leaders at Tiananmen Square who is now one of the top candidates to manage Berkshire Hathaway’s investment portfolio.

In a sign of the economy’s weakness, Friday’s report showed price increases continued to move down in the second quarter from already low levels.

The underlying inflation rate — which excludes volatile moves in food and energy prices and is closely watched by the Fed — increased by 1.1% in the April-to-June period from the previous quarter. That was the lowest reading of the core personal consumption expenditure index since the first three months of 2009 and came after a 1.2% rise in the first quarter of this year.

Other inflation gauges within the government’s report were also muted. The overall price index for personal consumption expenditures rose by only 0.1% in the second quarter, slowing sharply from a 2.1% gain in the first quarter. Gross domestic purchase prices rose just 0.1%, after a 2.1% increase in the first quarter. The chain-weighted GDP price index increased by 1.8%, compared to 1.0% in the first three months.

For all of 2009, the government said the U.S. economy contracted by 2.6%, compared to the previously estimated 2.4% decline. In the whole of 2008, GDP was flat, instead of rising 0.4% as previously estimated. In 2007, the world’s largest economy expanded by 2.1%, down from an originally reported 1.9% increase.

Uncle Sam wants small-business owners to take notice of a new health-care tax credit — one of the first provisions of the recently enacted health-reform law to go into effect.

Last week, the Internal Revenue Service announced that it’s sending postcards to more than four million small businesses urging them to check if they qualify for the tax break. It’s being offered in two phases, with the first worth up to 35% of qualifying businesses’ premium health-care costs for tax years 2010 through 2013. The rate increases to 50% in 2014. The maximum length of potential coverage for qualifying employers is six taxable years: four years under the first phase and two years under the second.

In general, to be eligible for the tax credit, businesses must cover at least 50% of the cost of health-care coverage for some of their workers, employ fewer than the equivalent of 25 full-time workers and pay average annual wages below $50,000. The IRS says the tax break is designed to encourage smaller businesses – which are not mandated by 2014 to provide health care, unlike companies with more than 50 employees – to offer health coverage to their low- and moderate-income workers.

Tammy Rostov, owner of Rostov’s Coffee & Tea in Richmond, Va., says she received the IRS’s postcard and expects her small retail business to be eligible for the credit. She offers health coverage to her five full-time employees and pays 100% of the premium, an amount that she says has increased by more than 200% over the past six years. She describes the tax credit as a welcome relief. “It’s a step in the right direction,” she says.

But other qualifying business owners are less enthusiastic, arguing that the tax break won’t make a significant impact on their bottom lines.

Pascal Helou, owner of Globotron LLC, a technology-consulting company in New York, says affording health insurance for his three employees is a non-issue given that he’s struggling these days just to stay in business. Since 2007, he says sales have declined 30% every year and his firm now has four clients, down from 15.

“For my business, this type of tax credit will not make a difference,” says Mr. Helou, adding that he has yet to receive the IRS’s postcard about it. “The real issue is the amount of business we’re getting. Nobody’s willing to spend money” on technology-consulting services.

Meanwhile, there are also some entrepreneurs who don’t believe the government should provide financial incentives for small businesses to offer health coverage to workers in the first place.

Jim Fab, owner of Fab Electric Inc., an electrical contractor business in Gaithersburg, Md., falls into this camp. Providing health insurance and other benefits to his 18 employees, he says, is “hopefully what separates me from the electrical contractor that doesn’t.”

Some small businesses appear to be left without any government aide under the new piece of health-reform legislation. These include organizations with between 25 and 50 employees and ones with less than 25 employees but payrolls that average $50,000 or more.

Tracy Betts, says her Springfield, Va., Web-design business, Balance Technology Group Inc., doesn’t qualify for the credit. While she employs the equivalent of eight full-time workers, their salaries’ average $71,000. “For me, it’s all about the programmers, and I can’t hire anyone for less than $90,000 (in annual pay),” she says.

Ms. Betts says a year and half ago she told her staff she could only afford to offer them either health-care coverage or a retirement-savings plan with a matching contribution from the company. All but one chose the latter benefit, she says.

Much has been said about the Obama administration pushing through new regulations on everything from health-care companies to banks — not to mention the impact these changes will have on the overall economy. But less attention has been paid to the way the new regulations will play out for entrepreneurs: Will stepped-up regulation stifle or stimulate growth? SmartMoney spoke with business owners, venture capitalists and analysts for a snapshot of six industries poised for growth.

Telecommunications

Even though shares of telecom giant Verizon Communications and its Finnish counterpart Nokia fell last week after reporting lackluster first-quarter results, there may be wind in their sails yet, says Drew Clark, director of strategy for IBM’s Venture Capital Group in San Mateo, Calif. One boost may come from the president’s National Broadband Plan, a program that aims to increase access to mobile broadband and support a nationwide public safety wireless broadband network. These firms, along with others, will likely benefit, says Clark. Per the Obama administration’s 2009 stimulus package, the government plans to spend $7.2 billion on the nation’s broadband projects.

Hosted Services

Perhaps the greatest beneficiaries of the president’s broadband agenda are the small companies that will have better access to faster web channels. FlexiSphere, a Hawthorne, N.Y., firm, offers financial services firms so-called cloud computing — technology that allows firms to share the server of a larger company via the Internet. As the nation’s infrastructure improves, so will access to the company’s products and services, says Tom Saleh, the company’s founder and CEO. “Cloud computing is all about better, faster, cheaper,” he says, adding that this is just a first step. “Cloud computing is doing for computing what the Internet did for communications,” Saleh says.

Information Technology

So far, the government hasn’t suggested the need to further regulate the information technology field, giving these firms a distinct advantage. That’s because the uncertainty surrounding regulatory reforms can both stymie a small company’s ability to make decisions and trigger a pullback in investment. In the first quarter of 2010, the IT industry raised $1.5 billion for 192 deals — the most of any other industry tracked by Dow Jones VentureSource, a research firm owned by News Corp., which also publishes SmartMoney.com and The Wall Street Journal.

Further, there’s a lot of pent-up demand for technology, says Karl Mills, the president and chief investment officer for Jurika Mills & Keifer, an independent investment advisory firm in Oakland, Calif. “Old inventory of technology gets written off quick when it becomes obsolete. However, during the downturn, many consumers and businesses put off buying new equipment,” he says. Plus, many of the larger companies in this arena, which often scoop up their smaller brethren, are well capitalized. “Microsoft could write a check and bail out Greece,” Mills says.

Media, Content Production

With that enhanced infrastructure, other beneficiaries include media companies and other content providers, which have struggled in recent years thanks to a precipitous drop in advertising revenues, says Sal Tirabassi, a partner at M/C Venture Partners in Boston. Between downloading movies and watching TV online at home or on a web-enabled mobile device, consumers’ appetites for content will likely expand, as will advertising opportunities. “Advertisers are increasing their budgets slightly again,” he says. “There will be a bit of a rebound there.”

Health Care

Thanks to federal and state stimulus dollars, the health-care infrastructure in the U.S. is about to get a triple bypass. Not only does the government plan to plow $20 billion into computerizing health records, the angel investment community has taken an interest in the sector. In 2009, health-care services, medical devices and equipment attracted 17% of total angel investment dollars, or nearly $3 billion, according to the Center for Venture Research at the University of New Hampshire. “We’re seeing a lot of companies come through here with technology solutions for innovating medical records,” says Michelle Murcia, the chief financial officer of TechColumbus, a business incubator and venture firm in Columbus, Ohio. “Health care IT is a huge growth area.”

Clean Energy

The U.S. Energy Information Administration projects that global energy consumption will jump 33% between 2010 and 2030. This added demand, combined with a mix of venture-capital investment and $43 billion in federal stimulus spending bodes well for businesses that make everything from solar panels and wind turbines to electricity grids and batteries, says Clark from IBM.

In addition, the government recently sweetened the tax incentives and subsidies for homeowners and businesses to install solar and other forms of energy-saving equipment. “Despite the fact that we’ve been in one of the worst recessions in decades, business in the industry has grown,” says David Kaltsas, president of SunWize Technologies’ systems group, a solar-panel installation and sales firm in Kingston, N.Y., which recently launched an installation franchise program. “Last year was tough, but we’ve since grown double-digits in our direct-installation business.”

He goes on to note that “The financing strategy is showing promise. Its small-and-medium-business division posted a 10% gain in revenue in the company’s fiscal fourth quarter ended Jan. 29 from the same period last year, versus an 11% gain for the company as a whole. Operating-profit rose 17% from the same quarter last year to $282 million, surpassing the $281 million in operating profit from Dell’s large-business unit, which posted an 8.4% rise from last year.”

You can read the entire article here, and check out Dell’s page to see if anything interests you! A market snapshot on Dell here.

Many of us think we use email well. We don’t.

Too many of us rush, causing confusion and requiring more time to clarify misunderstandings later. We miss chances to build relationships, motivate others, close deals and convey important information.

Avoid the following ten mistakes.

1. Using vague subject lines. “Meeting,” “Update,” or “Question” provide no value as subject lines.

Maximize the subject line’s message. PDA users will get the message quickly; everyone will appreciate the clear summary. You can communicate plenty in a five to 10 word subject line: “Your Action Items and Minutes from Last Week’s Meeting” or “Sam: See You at 10:00 Tuesday with Report In-Hand?”

2. Burying the news. Convey the important points first: put dates, deadlines and deliverables in the first one to three lines of the message (if not also in the subject line). PDA limitations, time pressures, cultural distinctions and value judgments keep many readers from reading further.

3. Hiding Behind the “BCC” field. At best, the ‘blind copy’ field is sneaky and risky. At worst, it’s deceitful or unethical. Plus, blind recipients sometimes hit “reply all,” revealing the deception. Instead, post the initial message and BCC no one. Then forward your sent message to others with a brief explanation.

4. Failing to clean up the mess of earlier replies/forwards. Few readers will wade through strings of previous messages.

• State your position clearly, even if context follows below in the email string. “Yes” helps less than “Yes, you can have the extra funding to hire 5 temporary workers.”
• Summarize the discussion to date: “See below: R&D is looking for more time but Sales risks losing customers if we don’t act now.”
• Force focus when necessary: “Let’s focus on cost now and revisit the morale and equity issues at our staff meeting next week.”

• Change subject lines cautiously. Tighter, more relevant subject lines work best, but even one letter’s difference upsets inbox sorting mechanisms.
• Cut extraneous or repetitive information.

5. Ignoring grammar and mechanics. PDAs have granted us certain sloppy flexibility, which means you’ll impress readers even more when you write precisely.

• Follow standard punctuation, capitalization and spelling rules.
• Think carefully about the tone different punctuation conveys. “Dear Betty,” is standard, neutral; “Dear Betty:” is professional, perhaps distant; “Dear Betty!” is personable, perhaps excessively so; “Dear Betty.” prefaces bad news.
• Avoid over-stylizing with high-priority marks, disorienting color or complex backgrounds.

• Avoid all-caps and excessives (like “!!!!” or other strings of punctuation).

6. Avoiding necessarily long emails. Longer messages sometimes work best; they can help avoid attachments’ hassle and security fuss. Don’t fear long emails but outline your structure and motivate reading up top.

• Provide a ‘mapping statement’ to allow readers to skim for key information: “I’ve included information, below, on the background, costs, implementation schedule and possible problems.”
• Emphasize the specific response you seek: “Please let me know, before Monday, how this project will impact your team.”
• Indicate an attachment’s presence and value: “I’ve attached slides that I need you to review before our meeting; those slides identify total costs and break down the budget.

7. Mashing everything together into bulky, imposing, inaccessible paragraphs. Length does not discourage reading; bulk does.

• Keep your paragraphs short, ideally no more than three to five lines of type.
• Open each paragraph with a bottom-line sentence.
• Use section headings (in all-caps) to facilitate skimming.

• Include blank lines between paragraphs and section headings.
• Avoid italics, boldface and other typeface changes which do not reliably carry across email systems.

8. Neglecting the human beings at the other end. Email travels between actual people, even though we don’t see or hear each other directly.

• Praise, precisely. “Great job” takes little time and space but can work wonders. Quickly wishing someone a good weekend, at the end of an email, might perk someone up without cluttering your message.
• Avoid conveying blame or delivering negative feedback over email. Talk to the person instead.
• Avoid sarcasm, caustic wit, off-color humor and potentially inappropriate remarks —all of these elements tend to confuse, disorient or fall flat over email.

• Consider using emoticons and exclamations (“!” but also “ha, ha” or “just kidding”) when they convey useful emotional context.

• Adjust your style to suit your audience. For people who don’t know you, a terse style might seem rude; a wordy style might seem unfocused.

9. Thinking email works best. Email is not always the best way to communicate.

• Need a quick answer from someone nearby? Stop by for a visit.
• Want a reply to several unanswered emails? Pick up the phone.
• Looking for more gravitas? Mail a letter.

• Need to explain a complex or sensitive situation? Arrange a meeting.

10. Forgetting that email lasts forever. Most of us read, send and discard emails at lightning speeds. But don’t forget that emails remain on a server somewhere as easy-to-forward proof of any error, offense or obfuscation we made.

Top 10 email mistakes made by management]]> http://reddingbusinessandemploymentlawblog.com/2010/02/top-10-email-mistakes-made-by-management/feed/ 0 http://reddingbusinessandemploymentlawblog.com/2009/10/watching-your-legal-budget-small-businesses-may-want-to-consider-employing-outsourced-general-counsel-services/ http://reddingbusinessandemploymentlawblog.com/2009/10/watching-your-legal-budget-small-businesses-may-want-to-consider-employing-outsourced-general-counsel-services/#comments Thu, 22 Oct 2009 18:11:00 +0000 Shawn McCammon http://reddingbusinessandemploymentlawblog.com/?p=114 It is important for any business owner, whether large or small, to have a good working relationship with an experienced legal counselor.  Your attorney should make sure your business or organization is in compliance with both state and federal laws and regulations, offer advice and guidance on key projects, and help with any other day-to-day needs associated with running a successful business.  Including an attorney who sees your business as a “business” and not a “legal question” is also important.   Your attorney should take time to get to know your business, spending time getting a better understanding of your business goals and objectives, as well as learning how you prefer to operate your business.  Having a good working relationship with an attorney who understands business and tries to improve your bottom line is critical in today’s economy.  Sounds expensive though doesn’t it?

Small and mid size companies often have smaller budgets and cannot afford to hire an in-house attorney, and instead rely on expensive outside counsel to handle the day-to-day legal needs of the business. Not only is this expensive, but also inefficient – outside counsel rarely have the intimate understanding needed to carry out the company’s vision.  Some firms or attorneys, however, will partner with your company to ensure affordable yet continuous contact with your business, the best way to truly understand your needs and protect your interests.

Often these arrangements take the form of what is often called “outsourced general counsel services”, where the attorney may work from the firm’s offices, or provide your company with an experienced general counsel who can office at your location on a part time basis. The fees are usually billed at a discounted rate commensurate with the value provided to the client.

Often times, without sufficient legal counseling, other members of your team spend time dealing with legal matters instead of their particular area of expertise. These matters can be delegated to your outsourced general counsel, whose sole purpose and expertise is to navigate these matters.

Having an attorney that knows your business and who can offer the following type of services on a fixed monthly fee provides a competitive advantage over the competition:

• Contract Review and Negotiation
• Employment Advice and Counseling
• Human Resources Advice and Counseling
• Insurance Review and Risk Analysis
• Lease Drafting and Review
• Non-Disclosure/Licensing Agreements
• Entity Formation, Governance and Record Maintenance
• State and Federal Compliance Review
• Dispute Resolution
• Day-to-Day Legal Advice
• Day-to-Day Business Counseling
• Legal Alerts and Updates

In today’s tough economy, you need a firm that understands how important it is for clients to receive practical and effective legal counseling in a manner that delivers real value.  Instead of paying high legal fees for individual services on an hourly basis, these outsourced general counsel arrangements often provide a flat monthly fee that is less expensive than the typical hourly rates offered by more traditional firms .  The fees are based on the value and quality of service clients receive, instead of just billable hours or time spent preparing the necessary documents or legal work.  The law firm should actually consult with you to determine what value the services have in your operation.

Here are some firms offering this type of service to its customers:

Liberty Law, A.P.C. (Northern California) – (disclaimer: Liberty Law authors this blog)

Shepherd Law Group (Boston, MA)

Lancaster Helling (Austin/Dallas, TX)

Hortin CC (Atlanta, GA)

Linsey Krolik (Campbell, CA)

For example, if state income tax withholding is currently $400 a pay period on an employee’s regular wages, come November 1st , the withholding will increase to $440.

Payroll departments should be prepared to receive employee inquires and amended w-4 forms after the effective date.

This new change was part of legislation (ABX4-17) signed by the Governor to assist in accelerating tax collection due to the budget crisis at the State level (I know,  not just at the State level).

Littler has a more exhaustive posting on the topic here if you would like more information on this tax issue.

Change in CA Tax Withholding Tables Effective November 1, 2009]]> http://reddingbusinessandemploymentlawblog.com/2009/09/change-in-ca-tax-withholding-tables-effective-november-1-2009/feed/ 1