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ABA Section of Business Law


Business Law Today

Snap Judgments
By Francesca Jarosz
Sharpening the knives
Some companies and law firms have moved team-building exercises out of the board room and into the kitchen. Amgen, Microsoft and UBS are among those sending their employees to sharpen their skills, corporate and culinary, in the kitchen.

Unlike rope-climbing, golf tournaments, and reality show knock-offs, cooking resembles office realities: cooperation is critical, resources are limited and deadlines are unforgiving.

Mary Risley, the owner of Tante Marie's Cooking School in San Francisco, organized her first session in 1980 for 24 summer associates who made fresh pasta, sauteed chicken with shallots and baked a chocolate cake. As a team-building exercise, a meal has an added attraction for lawyers involved in cases that may go on for years: a definite endpoint.

This trend is feeding a new growth industry. The San Francisco-based company, Cooks on Demand, increased its number of "chefs on call" by 150 percent. Cooking by the Book, a caterer in New York, organized 178 team-building events in 2006, a 24 percent increase over the previous year.
10th Circuit overturns Wittig
On January 5, 2007, the 10th Circuit overturned highly publicized white-collar crime convictions that have been called, according to the New York Times, the "Enron of Kansas."

At issue in United States v. Wittig (available at www.kscourts.org/CA10/cases/2007/01/06-3140.rtf) was the conviction of two executives accused of plundering Westar Energy of Topeka, the state's largest electric utility. The appellate court said that prosecutors failed to demonstrate the "core criminal charge" that the two execs committed wire fraud by neglecting to report personal corporate jet use to the SEC, basing its decision on Parr v. United States, 363 U.S. 370 (1960). Parr requires that to satisfy the burden of proof for wire fraud, prosecutors must clearly establish the falsity of a "legally compelled mailing," i.e., the SEC filing. The trial judge refused to instruct the jury about the SEC's disclosure requirements, thereby laying the grounds for appeal.

This decision follows the lead of the 5th Circuit's August 2006 decision to overturn a trial court decision against four former Merrill Lynch executives, a trend which reveals the possible fragility of corporate convictions on appeal, according to Wayne State professor Peter J. Henning, editor of a blog on white-collar crime.
Small business, small retirement?
According to online brokerage ShareBuilder. com, "nearly two thirds of the nation's small businesses fail to provide workers with any retirement benefits," reports the U.S. News & World Report.

Turns out not only big Fortune 500's like IBM and General Motors are contributing to retirement anxiety by picking up cheaper 401(k) plans while eschewing traditional pensions. As Americans live longer, pay more for healthcare, and worry about Social Security, it's troubling that only 14 percent of small firms surveyed even offer 401(k) access, and even more troubling that 63 percent of small firms offer no retirement benefits at all.
Fancy words to forget
In legal terms, specificity is king. According to Bryan A. Garner, editor-in-chief of all current editions of Black's Law Dictionary, some words commonly used in legalese may make you feel like a lawyer, but sound like a fool.

And/or: Not even part of the English language, the Illinois Appellate Court calls and/or a "freakish fad." Choose just one, and remember that or includes and. Don't give anyone the opportunity to interpret your meaning in bad faith.

Herein: Another word that's the enemy of accuracy. Instead, be specific, use something like "in this agreement," or "in this section."

Pursuant to: The rulemaking body has been trying to get rid of this one for years. Garner recommends, "instead of saying something is required pursuant to the contract, say that it's required under the contract."

Whereas: There are other, better ways to begin a contract, ones that don't begin a never-ending sentence. "Try the subtitle 'Background' or 'Recitals," suggests Garner, "followed by short declarative sentences explaining what's about to be done and why."

The lesson behind all of these fancy words is the same: say what you mean, and say it clearly.
Doctors at work
In an attempt to control runaway healthcare costs, the New York Times reports, more than 100 of the largest employers in the U.S., including Toyota, Sprint, Nextel and Pepsi Bottling Group are now providing in-workplace medical services, and more than 250 are expected to follow suit by the end of 2007.

The driving force is cost—employers hope to treat employees before they need expensive outside services. For every $1 spent at its three onsite clinics, Florida Power & Light saved an estimated $1.50 on outside doctors and emergency rooms. Unlike discontinued 1970's-era workplace clinics, the new facilities treat nonwork-related problems including asthma, diabetes, weight and smoking.

Some companies have hired independent vendors to provide medical services in part to address privacy concerns. Not surprisingly, the number of medical service corporations have grown to meet the need.
Don't get caught leaderless!
A survey by Robert Half Legal found that 53 percent of lawyers responded "no" to the question, "Does your law firm/corporate legal department currently have a formal succession plan in place of key leaders and managers?" Apparently succession plans are being neglected in favor of more urgent and billable concerns, but losing a leader without a planned and trained replacement can stymie productivity. Charles Volkert, executive director of Robert Half Legal, recommends choosing high-potential employees and mentoring them for advanced leadership roles. Volkert advocates for the grooming process, explaining that "succession candidates must be given ample opportunity to build their skills and leadership abilities in practice management, new business development, marketing, strategic planning and client service." A smooth transition is worth the effort.
A (relatively) corruption-free America
Although recent scandals involving corporate corruption (Enron, Tyco, Worldcom) may have had you thinking otherwise, the United States is actually relatively devoid of corruption, at least on a structural level, according to Business Week.

Funding or starting a business without the worry of covering up bribes and kickbacks is one of the main reasons that the U.S. leads the world in business creation, explain Jack and Suzy Welch. Consider the difficulty of entrepreneurial success in places like Latin America, where corruption is omnipresent, much of it stemming straight from the government, or take a moment to absorb the fact that bribery was legal in Germany through most of the 90's, according to the Welches. Forget the payoffs, now all you need is that great idea

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