This week, I read a great new post from Steven Adler in New York. He described some reasons why employees (and companies) should use mediation. The article is packed with great insights. I highly recommend that you check it out!
Read about it here.
There are many different potential elements in estate plans. Differing needs call for different instruments. However, most estate plans should at least include the following:
Depending on the needs, an estate plan may also include:
An estate plan is different for each person or family. Everyone should have an estate plan that fully encapsulates what he or she wishes to happen upon death.
To no one's surprise, litigation costs have skyrocketed over the last few decades. And litigation costs may be the only thing that goes up but never goes down (with the given exception of taxes, of course). Recently, an alternative dispute resolution center (The International Institute for Conflict Prevention and Resolution, found here) came up with a potentially revolutionary idea: set up the ground rules for any litigation ahead of time.
The ideal time to put forth a dispute resolution mechanism is in the beginning when all the other contract documents are negotiated/signed. As one client eloquently put it, "at the beginning we could all agree to sing 'Cumbaya.'" In other words, everybody's willing to make the deal happen because each party is eagerly anticipating the profits that will surely come.
After the deal is struck, each party is less willing to negotiate. And when there is a dispute, negotiating out a dispute resolution structure is costly and time-consuming. To put it bluntly, you've got a mess if you haven't accounted for disputes.
For that reason, we strongly encourage everyone to insert dispute resolution language into contracts whenever possible. If you use (or should use) terms and conditions, insert a dispute resolution mechanism into them. It's much cheaper to do that than to wish you had later.
In fact, for that reason you'll find that the terms and conditions associated with the use of this website (and our services) includes strong language about resolving disputes.
Many people frequently insert arbitration or mediation provisions into contracts. And we do, too. However, idea that the contract and/or terms should deal with the process of dispute resolution is the real game-changer. In other words, if you could make litigation as inexpensive, quick, and painless as possible, how would you do it? Well, that's exactly what these folks are saying to do.
What about the legality of these agreements? That's not so certain. We know that, for the most part, major provisions contained in these agreements have been upheld. I offer my humble opinion that unless due process (how legal rights are enforced) is substantially interfered with, these agreements will stand. The battle lines are yet to be drawn when it comes to litigation.
On the other hand, alternative dispute resolution (e.g., mediation, arbitration – "adr") is less dependent on structure. Essentially, you can largely craft how to resolve disputes using adr knowing that courts generally allow parties to craft their own dispute resolution mechanisms.
The moral of this story: Minimize your exposure to excessive litigation costs at the outset, when doing so is quick, easy, and effective. Doing so will not guarantee small litigation expenses, but this tool can lower the likelihood of large legal costs. This is a simple preventative tool that has great potential.
Contact us if you are interested or have questions. AH Contracting Solutions provides contract drafting, review, and analysis. Contact us by: email at alan@ahconsultingsolutions; twitter@ahcsolutions; on facebook ; or phone 318.615.9812.
For most people, having a will is the sum total of an estate plan. That is false. An estate plan is preparation for leaving assets, the handling of debts, and dealing with personal matters after one dies. A will is a good start; don't let it be the end. But it is the biggest piece of the puzzle, and should not be ignored.
A will:
A will DOES NOT:
That being said, a will is a critical part of an individual or couple's estate plan. But just be aware that it is a start and not the whole enchilada.
Follow our blog to get more useful and insightful ways to ensure that your estate plan does what you want it to.
More Information about Exploding Offers (and a Little Bit about Negotiation in General):
There is a well known maxim that negotiation will expand to fill the available time. In other words, negotiation will take up whatever time you give it. As my mentor at my first law firm told me, "If you have a negotiation scheduled to end at 5:00, the parties will settle at 6:30." I have found this to be correct also. In the Secrets of Power Negotiating, Roger Dawson says: "the rule in negotiating is that 80 percent of the concessions occur in the last 20 percent of time available."¹ In a very practical way, deadlines are useful because that's when things tend to get done.
[On a side note, that is why I rarely, if ever, continue hearings or trials. If opposing counsel requests it, I will generally agree to do so once and only once. Simply put, every extension of a deadline simply makes the dispute take longer to resolve. ]
Exploding Offers Can Be Take-It-Or-Leave-It:
They don't have to, but in situations where one party has an advantage in quickly making the deal OR to keep the other side from exploring other alternatives or opportunities, they will often use a take-it-or-leave-it exploding offer.
In those situations, it is best to be wary. Remember that the other party will always act in it's own best interest. There is probably a reason for the expedited deadline!
Perhaps an example will illustrate this point. Consider a personal injury negotiation. Often, the injured party is very motivated to settle because he or she has been out of work, is facing significant medical bills, and desperately needs money to survive. The insurance or other party (we'll just assume it's the insurance company for this example), on the other hand, have incentive to take as long as possible to settle. First any money not paid out in a settlement earns interest, which means more money for that party. The insurance company also knows that it has the resources to "hold out" for a better deal – giving it a distinct advantage.
Which party (if any) would be likely to make an exploding offer? The injured. Why? Because time and finances are not on his or her side.
The point: Be careful when dealing with exploding offers. Don't be too quick to accept without thoroughly going through the process.
Check back at our blog for more posts about how to deal with exploding offers.
¹Dawson, Roger. Secrets of Power Negotiating. 2nd Edition, Career Press (2001).
I'm not the biggest hockey fan in the world, but having gone to the University of North Dakota (7-time National Hockey Champs) I can't help but be interested. And after the initial exposure, I've discovered that hockey is a great game. I really enjoy it.
The biggest NHL free agent this year, Ilya Kovalchuk, recently signed a 17-year deal for $102mm (here). Sounds great, right?
Well, the NHL rejected the deal. Why? Because the contract was leveraged on the back end by including five seasons with Kovalchuk playing for the league-minimum $550k. Apparently, those seasons were tacked on with the intention of minimizing the actual effect of the contract on the salary cap. Neither party actually intends on Kovalchuk playing at age 44 for the minimum. The goal was to make the average compensation lower for salary cap reasons.
As mentioned above, the NHL has disallowed the contract as a blatant attempt to circumvent existing salary cap rules. Whether they will survive a union challenge (or not) is a topic for another day (my guess: they won't – but they won't have to because Kovalchuk & NJ will renegotiate).
The question for today is, can we learn anything from this?
There have been many times that I have been asked to make something appear to be one way "on paper" and the reality is quite different.
It's a bad idea.
It doesn't work because it doesn't do what you really want it to do: protect you if there is a dispute. Yes, it's possible that a court will find that each party should have done things according to the written contract. But that cuts both ways – and can hurt you as much as it helps. More likely, courts will find that the actual contract was something other than what's written and largely ignore the written contract.
Further, it mucks up the situation. It only can add to disputes. The best contracts are the ones that clearly and succinctly state the terms of the deal. And most of the time, a good lawyer can find holes in any good contract! Now, imagine a wordy, inaccurate, and unwieldy document that doesn't reflect reality. Lawyers will have a field day with it.
So what does that mean? It means increased costs for you, less advantageous settlements, and more uncertain litigation outcomes. Bottom line: bad stuff. The message: as much as possible, make the contract accurately describe the reality of the deal.
Check us out if you have contract needs. AH Consulting Solutions provides contract drafting, review, and analysis. Contact us by: email at alan@ahconsultingsolutions; twitter @ahcsolutions; on facebook ; or phone 318.615.9812.
To no surprise of the parents out there, there is a movie coming out soon called "Cats and Dogs: The Revenge of Kitty Galore." The commercials are everywhere; my kids are excited beyond belief. My favorite part of the commercial is when a squirrel delivers a message. Check out the video at the 45 second mark:
You have no doubt heard exploding offers on television: "For callers in the next 15 minutes…" and "This offer is good for a limited time only."
Exploding offers are common in negotiations. Often, the other side will say something like "This offer is good until noon tomorrow. If you haven't accepted by then, we'll see you in court." Or something similar.
Why Do Parties Give Exploding Offers?
There are a number of reasons. First, there may be a legitimate reason for the deadline, such as a hearing, trial, etc. It may be a way to superficially impose a stop point.
An exploding offer may also be an attempt to hide a rather weak offer. Negotiators who use exploding offers may perceive themselves to be at a disadvantage relative to their counterparts, or they may simply facing time, budget, or information constraints. Regardless, those who make exploding offers are often attempting to conceal a disadvantage.
In other posts, we'll discuss other details of exploding offers, including how to deal with them.
Happy negotiating!
You have likely heard about the Facebook ownership controversy. If not, allow us to bring you up to speed.
The skinny: Founder and CEO Mark Zuckerberg may have signed a contract giving another person ownership of 84% of the company. As a freshman, Zuckerberg took up a coding project for a person named Paul Ceglia. Zuckerberg charged $1,000 for the work. At some point (at least according to Ceglia's legal filings) Zuckerberg mentioned he had a small project of his own. He conceptualized it as an online yearbook for Harvard students. According to Ceglia's documents, Zuckerberg called it "The Facebook." Ceglia allegedly gave Zuckerberg an additional $1,000 for the project in exchange for a 50% share of the company, plus 1% extra for each day the project went past its January 1, 2004 due date. Total amount: 84%.
According to Zuckerberg, that's not the way it happened. His attorney is "unsure" if he actually signed the document, and says that Facebook didn't exist back then anyway.
What a mess. Facebook is now, of course, a giant company worth a reported $24.6 billion. By my simple math, that makes Ceglia's claims worth about $20.16 billion. In other words, Ceglia alleges that his $1,000 contribution and contract has grown by 2.016 billion%. That's not a bad growth rate, especially over mere 7 years or so.
So what's the lesson here? There are a multitude. First, read what you sign. Be sure that you agree to what's written. If you don't agree, don't sign. It's that simple. Second, a contract can come back to haunt you several years later. States allow for a period of anywhere between 2 and 15 years for the statute of limitations to run (when you aren't accountable any longer). In
Did a newly of-age Zuckerberg think that little contract would ever amount to anything? Not likely. And we've all been there. Most of the time, I hear: "Just get the deal done." That's fair enough. But a certain price brings a certain amount of risk in addition to whatever goods or services that are purchased. When the risk exceeds the tolerance level, don't do the deal. It's that simple.
So the third lesson to learn from this experience is simple: get the proper guidance when it comes to contracts. Yes, anyone can read them. But understanding and interpreting them is often an art. Don't think that the cheapest way (doing it yourself) is the best way. Sure, sometimes it's okay and fairly harmless. But you never know when that "small" contract is going to come back to bite you.
Isn't that right, Zuckerberg?
I'm a sports nut. I love sports. And if you love sports, you probably hate the "Evil Empire" – the Yankees. But we love to hate them!
Recently, the iconic owner of the Yankees, George Steinbrenner, died. While tragic, his death happening in 2010 (as opposed to, say, 2009 or 2011) probably saved his estate hundreds of millions of dollars.
How?
Well, there's a great article I came across that explains why. Check it out:
THE BOSS’S ENDURING EMPIRE: Analyzing Estate Tax Consequences of George Steinbrenner's Passing | Joy Hodge – JDSuprahttp://bit.ly/dsYLk5.
Thank you for visiting my site. I am an attorney who has experience with business, construction, and family law. I'm interested in partnering with businesses and individuals for cost effective contract and dispute resolution solutions.
