When Your Family Office Finally Gets Hacked…

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Do you know the story about the motorcycle? Well, there are two motorcycles. One that was dropped and the other, that will be dropped.  The same can be said about hacking.

 

So if you’re like me – you’re probably reading this on your phone, in your car, at a red light (I hope) or parked. Or, if you’re like some of my clients, you are reading this on your iPad mini, on your yacht on Nantucket, or maybe even in the Seychelles. It is August after all.

 

Often, I ask my clients to review an important documents – or they send me one for my review – and we email a documents and files back and forth and from one person to many while we determine how best to proceed. So picture yourself, whether it is an investment decision or a litigation or a transaction. 

You know the drill right? You can picture yourself, whether it is an investment decision or a litigation or a transaction, sending document drafts back and forth.

What about documents that you draft on your work computer (which you also use personally) and email it to yourself to work on over the weekend or from home? Ever do that? Or, maybe you upload documents to a cloud server like Google Drive or Dropbox? 

  1. Info Sent Over The Internet (via Email) Goes Thru Many Hands

For example, this list is all the places the document takes between my computer and a hypothetical recipient located at the Nantucket Boat Basin (There is no private info here; it is simply a trace route from my server to a public web domain address for illustration only). This trace route shows all stops that data takes between me and the end point.

2) Identifying the Risks:

The risk is simple:

  • Your personal or corporate info could be put up on the web,
  • held for ransom (See below)
  • given to the other side in your current transaction or litigation
  • tax returns filed and refunds taken (this happens more often than I can imagine); 
  • or worse (Remember the Lifelock guy? ID stolen thirteen 13) times!!)
  • Security CEO had his id taken and someone filed his bankruptcy! (He got it reversed but still)

At the source of the problem is very bad people wanting to take money and make your and your client’s lives a nightmare.  More specifically, the bad people may unwittingly stumble on confidential info that will disrupt your business or personal objectives. And, they are simply getting more brazen, because the tools they use are even easier for them to get.

In May 2017, the Wannacry hack (or more accurately technology developed by the US National Security Agency), affected many who lost access to critical data unless they paid a ransom.  It will happen again and it will only get worse because tools to gain access to the Internet and all connected devices readily exist.

– Many did not call law enforcement;
– Most did not have sufficient back ups;
– Even if they did have back ups, the data’s confidentiality was compromised (probably); and
– Many of those affected were family offices.

This map posted by NPR reflects the broad swath of the effected:

Ernest and Young Identifies the Problems in the following grid:

(Source E&Y: https://webforms.ey.com/Publication/vwLUAssets/ey-pdf-cybersecurity-protecting-a-family-office/$FILE/ey-cybersecurity-protecting-a-family-office.pdf)

2) To Know ‘Thyself’ Is To Know Your Risk:

a) Map Every Connection of Your Network and Have an IT Professional Ethically Hack Your Network

Here is an example of a map:

Source: https://www.paessler.com/network-mapping

You might even try it for free for your own network: https://www.paessler.com/download/prtg-download (This is not an endorsement but rather a recommendation that you had better start getting familiar with all of the doors and windows into your network. Call me if you want the recommendation of recommended professionals)

Think about all the devices, computers, wi-fi modems (even the ones on boats), Apple watches, iPhones, ipads, cloud storage, lap tops etc that your users use!

b) A Note About Passwords: 

The truth is that the biggest risk is that your passwords will be accessed (not even hacked) by a former employee, a contractor who gets curious, or even an existing employee.  How would you know if someone other than an authorized individual accessed YOUR machine while you were away, your account, your cloud storage?  You wouldn’t.

C) Encryption:

A few words on Dropbox and Google Drive 

These fabulously convenient cloud storage locations do not tell you who has accessed your drive.  Even if you share the drive with authorized users, do you know when they access the info? Do you care? What if some one hacks dropbox or google drive? Your data may be encrypted there but how do you know?

One way to be sure is to encrypt your data at your local computer using something like boxcryptor and then uploading only the encrypted version. Sure it is cumbersome but then you won’t have to worry.

Turn on Encryption on your Iphone and Your Laptops

Apple devices come with great encryption. That way if your device is stolen, no one can get access to your data.

Take the time to learn about the risks to your organization’s info. I’d be happy to discuss all of the above topics including ethical hacking, solutions and what to do if it already happened.

Join my list for free forms and useful negotiating tips.

 Join me

 

 

 

 

[A Whole Week With an Angry CTO] — How A Tech Services Company Closed Their Big Customer Anyway (Episode: 0523)

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[A Whole Week With an Angry CTO] — How A Tech Services Company Closed Their Big Customer Anyway (Episode: 0523)

May 25, 2017: Gregory Rutchik

Sometimes getting the internal team to agree is more than half the battle

Preface by Gregory/Editor

This is about Takashi, a CEO of a Silicon Valley-based Cloud computer managed services company and his CTO Jiro. The Company has about $3mil of annual revenue with a goal of growing to $8mil in two years.  Everyone’s compensation is tied to that goal. Takashi has a strong number 2 in Jiro, his CTO.  Jiro and Takashi have worked together for 16 years, and are close friends. Earlier this week, Jiro was very angry at Takashi for the business direction things had taken.

I recently dealt with coming between this CEO and the other major internal decision-maker in my client, while trying to advise them on how to close a large customer.  What do you do if your internal team disagrees on how to proceed? How do you help them move forward and close the deal while healing the internal conflict? Is it always clear?  This story is shared from Takashi’s and Jiro’s vantage point.

Enter Takashi

Last quarter, a large customer we were working on finally was ready to hire us.  The only problem was, they (a) wanted us to take more risk over their network’s product development staging area than our standard service level; (b) wanted us to devote extra development resources; and (c) they would NOT tell us exactly what THEIR downstream customers do with the product.  We were pretty sure it was aerospace related.  Knowing our customer’s customer is beyond our NORMAL need to know but this was not a normal deal.  Plus, we need this customer to meet our growth goals.  We’ve invested tons of time proposing and quoting and learning about this customer.  We can do their work but at what risk.

I had sold the client on the following: out of the box service offering plus some customer development work was the right skill level for the customer.  They would have to go to Europe or Asia to compete without skill set and based on their business model, I knew that was a non-starter for them.  Little did I know that that they would impose their own terms late in the game and force my hand.

A Word from Jiro

From my perspective, it was simply a question of resources.

“I cannot have my engineers spend too much time on a customer custom development. That means fewer individual hours doing monitoring and custom maintenance, which is our bread and butter.”

“Our business is set-up to allocate flexible human hours to each customer but we do not have so much wiggle room to add hours for development without a significant quality impact elsewhere.”

  • The customer wanted us to do custom database development;
  • The customer wanted us to “indemnify them” and take on much more risk from damage and infringement type claims;  and
  • The customer wanted us to guarantee the availability of specific engineering staff.
  • In sum, the customer wanted us to act as their custom development team.  That was not our business and everyone but my CTO saw this as a good thing.  

Takashi says:

When I mentioned this at an internal meeting, people sat with hands in their laps, shook their heads, stares went to Jiro and many sat with their mouths open waiting to scream. The common thread was:

“Wait? What?

How have we gotten this far down with such a big customer and consider walking away? How was what they wanted not our ideal client?

Does everyone on the team really seeing this as a good thing?”

The answers were not so simple at first.

Then Jiro added:

“Maybe they are our ideal client.”

Now with intense curiosity, they lean in.

“And Jiro’s concerns?” someone asked

Everyone needed to understand his concerns about staffing and the real concern Jiro had about quality. But I also wanted everyone to understand how this client made us pivot and focus on what was really the key to our business – and in one word — it was MARGIN.  

Let me share what we learned.

How we did it…

Offer broader services at the better margin: We gave the customer what they wanted at a price that was our base offering plus a fair estimate of our cost plus 20%.  And we explained it to the customer so they saw our math.  

Staffing tied up:  We offered our staff a choice.  We gave internal staff the chance to float across project categories, gain training and offered the customer on-time and early delivery pricing incentives.

Quality control: We listened to the customer but gave them the choice.  “What was more important,” we asked, “was it the stability of your development environment or price.”   The customer wanted quality and fewer bugs.  

THIS IS WHAT WE DID….

Lesson #1: Margin goals were reviewed

BY PEELING BACK TO THE BASICS OF OUR BUSINESS WE LEARNED WE COULD GET HIGHER MARGINS.

Task: We looked at which service offerings yielded highest margins and least amount of quality/trouble tickets.  We had never been forced to do this before this customer.

Result:  Higher margins.

I can’t stress how important this shift has been for me.

Lesson #2: WHAT GOOD THING ALSO CAME OUT

Yes, it’s absurd to think that we did not give our customer the choice between two prevailing conditions.

Result: Without struggling to cover quality with limited staff, we now have a customer that shares the risk of their own business demands. They do not have to bear the whole risk – that would mean they would just do the work themselves.   Positive outcome for both sides.

Lesson #3: POSITIVE OUTCOME

In order for us to explain how our business worked for our customer in terms of cost and margin, we had to first understand it ourselves.  The process caused our whole team – and not just finance – to understand the margin components and margin impact of every single facet of our business.  

“This was one of the most valuable exercises we have had internally,” Jiro admitted

Result: We developed a broader service offering but more importantly, we gained a clearer understanding of which parts of our offering yield the most margin and at what top line cost.

Every demand from a customer creates an opportunity to test the demand against the basic assumptions of our business model.

How to Increase Margins Without Sacrificing Our Internal Team:

1. Really listen to what is important to the customer

2. Have an honest margin analysis methodology for every facet of your business

3. Develop clear tools to apply customer demands against margin analysis

4.  Give internal staff a seat at the table to discuss the opportunity, the financial and operational impact and whether or not it fits with your existing “ideal client” profile.

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AFTERWORD BY GREGORY: Are all of your customers a version of your “ideal customer” ? If not, how did you reconcile the prospective customer with your business plan? How would you approach it? Please share your thoughts below…..

I’m Sure You Know This: Negotiate Your Exit and Your Salary At The Same Time !!

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You’re so excited by the interview. They asked you all the right questions and you had all of the right answers right? Then comes the offer.  Now what?

Did they ask you for your salary “history”, “requirements” or just ask “so, what are you making?”  

If this is your first job after college or graduate school, chances are, YOU HAVE ZERO ROOM to negotiate BUT…

One of the most common questions I get asked is about salary negotiations and whether you should “be honest” about your current salary, “how to get the most salary and benefits possible” and increase your total compensation.

I’m going to give you the good news and the bad news all at once.  If you have not thoroughly researched the employer and the compensation ranges for your level, you’re not going to find anything magical here.  You’ve got to give me something to work with.

Here are some basic’s that I would want to know:

  1. After you’ve looked at glassdoor and scoured google for what ever you can about salary, if it is a publicly traded company, YOU MUST read the public filings on edgar.gov.  Search for the company and employment agreements.
  2. It is all public info. If you take the time, and know how to do the search. You will find gold. Feel free to hire me to do this for you. The below is just an example and will definitely NOT apply to you.

3. The more you search for like roles in other companies and the more you know, the more capable you are to ask the right questions.

Equally important, what I can tell you is this:

REGARDLESS OF THE LEVEL OF EMPLOYEE, YOU MUST BRING UP AND NEGOTIATE YOUR SEVERANCE NOW.  You will never have the chance to negotiate your exit again (with any leverage).

This is an example of what severance looks like for a very financially fortunate person:

(https://www.sec.gov/Archives/edgar/data/1288776/000128877614000075/exhibit1003_09302014.htm)

The above letter is not YOUR severance or your deal BUT the questions I would want to know:

  1. Are you at the level in the Company (e.g. your future employer) where there is severance? And if so, what is the policy.
  2. If no, you could tell them what you want and see their reaction ONLY if you have done the research in advance to know exactly what your predecessor got.  Is this Company the type that has arbitrated with former employees? Wouldn’t you like to know that before you start down this road?

Most importantly: their answers to your questions will give you a good idea about what type of organization you are considering joining.

Give me a call – I can help you work out a salary and severance negotiation that fits your situation. 310-570-2399

Legal Issues in the New Realm of Artificial Intelligence

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ARTIFICIAL INTELLIGENCE PLUS LAW EQUALS WHAT?

So what are going to do with all of the data that we collect about ourselves? Maybe give the job to machines. Isn’t that one of the goals of artificial intelligence? In a word, yes.

(More Questions than answers)

1) Rules?

Are we in the realm of open source?

Privacy issues? Use and access of data across continents?

How will our US use of AI be impacted by having to comply with European Data Privacy laws?

Where is the machine operating? Effecting? Jurisdictional issues?

Contract law?

Labor laws? There is tremendous concern over displacing workers with machines.

2) Responsibility? 

What if the [recent] Cyberattack on our global infrastructure was committed by a machine?

It is a concern some seem to have had in this article: https://techcrunch.com/2015/08/22/artificial-intelligence-legal-responsibility-and-civil-rights/

Is artificial intelligence just software or even hardware created by a machine?

A machine creating a machine?

Who is responsible for a machine built to “commit” war? A crime?

This was the point of the below article and the open letter written by Musk and others: https://techcrunch.com/2015/07/27/artificially-assured-destruction/#.woknrl:EnLr

I am not talking just moving money, stealing personal data, shutting down infrastructure, bio warfare, hacking.  I am talking about all of the above. 

3) Ownership?

  • What about the IP? Who owns the ip created by a machine?
  • Does it matter?
  • Who is responsible for the mistakes of a machine

I am troubled by the suggestion here that the law simply did not hold a manufacturer responsible when its machine hurt an individual because the manufacturer did after all follow regulations. https://techcrunch.com/2017/01/28/artificial-intelligence-and-the-law/

Feel free to email me with the legal issues that come into play when we discuss artificial intelligence.

 

Yeah, I am sure you consider yourself a great negotiator right?

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 Nothing to learn right?

Well, one of my mentors fifteen years ago taught about “Getting to No” in the context of sales.

Get a no quickly to qualify a prospect. I think it equally applies in negotiation. For example:

“Will you agree to limit our obligation to repairing the service performed, deliverable or product for a year after closing?”

Or, in real estate deals, we might ask an investing partner:

“In year three, if real estate prices are way up, can you assure us that you will not force a sale until year seven?”

The “no” that follows tells you so much about where to go next if you really pay attention.

“No’s” give us boundaries but also clarify how one sees the relationship.

In the first case, I might ask, for starters, how* the customer would want to handle when things change or do not work as planned?

 

In the real estate situation, since we know our client cannot prove out its return on cash goals if a sale is forced in year 3, we might have to re-think our assumptions.

The real question becomes how often do you practice the art of paying attention?

*how questions are my next topic of focus

How would you rate yourself as a negotiator? 

Do you believe the compliments given by your opponent?

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Yesterday, a Mongolia-based consulting services client shared a common negotiation tactic in the US. The nationality of the speaker only highlights an outsider’s perspective.

At a tense point in the negotiation, the American said:

“I would never want to be on opposite sides of this issue with you,” the American said.
“Yeah why is that?” the Mongolian side asked.

“Because you just seem too fierce, I would worry that it wouldn’t end well for me,” the American said.

Americans often use the “false prop up the other side” approach to appeal to ego. Regardless of the words, it is a false compliment to gain leverage and the speaker does not believe it.

I get this often with opposing counsel who says things like “I really like you”, “you’re so smart” or worse, they call my client or me “pal.”

These things ever show up in your world?

It is often said in a genuine tone but the fact that it is a negotiation tactic is surprisingly lost on many.

The Mongolian’s below response summed up how the logic of false compliments falls apart.

“You and I are negotiating a transaction to do business together. We are doing the deal because we cannot do it ourselves. If you are telling me that when the chips are down, you will turn from our business partner into our adversary then this discussion is over.”

Would you like to become a better negotiator? Let me know what types of things you negotiate? Shoot me an email – gregory@rutchik.com

Corporate Formation

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This article is about how to approach the question of forming a new entity.  Many wonder what the steps are to forming a new entity and what questions should be considered. This list should not be seen as the complete list of questions but rather an approach. I would be happy to discuss your particular situation.

  1. Picking an Entity Type
    • Do you already have an entity?  Are there problems? Read about common issues.
    • Have you maintained the “corporate formalities” to be able to argue that the entity protects the individual owners from certain liability?
    • Are you in a regulated industry such as the financial industry, health care or do you store customer data in the EU?
    • Where do you do business? Where are your customers? Your officers and directors?
  2. Common Entity Types: The tax goals, liability issues or issues regarding jurisdiction (i.e, how much risk of being sued in a specific state are you willing to take?) often dictate the entity forms.
    • Delaware entity that is qualified to do business in another state
    • Delaware entity only qualified to do business in Delaware – often as a holding company
    • A California entity only qualified to do business in California
  3. Filing Process and Timing
    • Each state has its own one-time filing and annual fees
    • If you are forming an entity in Delaware, filing can happen almost in one day
    • California takes as long as 7 to 10 business days and a statement of information must be filed within a reasonable period of time (e.g. 90 days) after formation
    • New York requires publication in a News Paper
    • Appointment of a Registered Agent: We recommend that a Registered Agent be appointed – such as Corporation Services Corporation.  They charge an annual fee.
    • If you use a different name than your entity name to conduct business, you will ALSO have to file a fictitious business name in the county (or counties) where you (or the entity) operate(s) your business.  Each filing has a filing fee and most require publication so check with your local county rules, or ask me.
  4. Shareholder and Operating Agreements: 
    • One of the most important parts of forming your entity is the agreement between the owners.
    • Depending on whether you form a C corporation or an LLC, you will have a shareholder (for C corps) or operating agreement (for LLCs)
    • The most common error I see is 50/50 ownership with no mechanism for resolving deadlocks.
  5. Fees: I often do formation work for a flat fee and have various packages depending on the particular issues presented by your entity and arrangement.

For more discussion on corporate formation services, please write or give me a call at 310-570-2399

Representative Cases

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Are you in:

biotech, software development, device, game and video console and content, book publishing industry (writer side), property and casualty insurance, life insurance, real estate broker and real estate development, automotive, content development, cloud computing, fashion, manufacturing, food and/or food additives?

Some examples of the past and present clients/matters are:

1) Copyright/ Trademark infringement Litigation

a. Online and Web hosting

• Third World v. XHOT99, Inc. US DC CD. Defend web-host in contributory copyright infringement, RICO, trademark infringement claims. Affirmative defenses include DMCA and CDA.

• Jupitermedia (Fulbright Jaworski) v. Jupiter Hosting – US DC Northern District California. Defended web hosting company from injunctive relief trademark infringement and cybersquatting allegations. Successfully opposed motion for preliminary injunction. Published opinion. (Judge Claudia Wilken). Concurrently advised Jupiter Hosting on all of its commercial transactions and subsequently provided assistance regarding its sale to Navisite in 2007.

• DICK DACK LLC. Advise adult porn producer re DMCA and 2257 custodian of record issues. Review of COPPA and general business advisor.

b. Movie

• Rivera v. Does, US DC SDNY. Obtained TRO, seizure by US Marshall and preliminary injunction on behalf of filmmaker of “ENRIQUILLO” (Story of discovery of Dominican Republic) against cameraman and investor who purloined film. (Judge Kimba Woods)

• Brush Media v. Boujaklian. (2002 WL 1906620 (N.D. Cal.) US DC ND. Adult DVD movie producer. Successfully prevented copyright infringement action through motion to dismiss for lack of subject matter jurisdiction. (Judge Eliza Laporte)

• Eslinger-Galligani adv. Domingo Gutierrez. Advise movie production company on acquisition of life story rights, drafting options and partnership agreement.

c. Video Game

• Sudoku Developer adv. Danger Technologies. Advised on-line sudoku game re licensing agreement with mobile phone developer and mobile phone platform.

• Doe v. Investor. Advised on-line game/personal map developer re licensing agreement risk and litigation strategy re venture investor.

• Eidos acquisition of Crystal Dynamics. Conducted IP audit on behalf of Eidos and negotiation of various commercial agreements related to acquisition of Crystal Dynamics by Eidos including domain names, game titles, content and software.

• Beeck v. Cinemaware, US DC NDCA. Represented video game development team re claims of copyright infringement, breach of licensing agreement and non-payment of royalties.

d. Computer Accessory

• Grixxxx Technology adv. Apple, Inc. Re-negotiation of Made for Ipod agreement and litigation strategy re anti-trust and breach of contract claims

• Disruptive Technology adv. Apple, Inc. Re-negotiation of Made for Ipod agreement and related commercial agreements.

• Acme Studio v. Acme Made. US DC Northern District. Defended computer laptop and accessory manufacture, owner of acmemade.com from allegations of trademark infringement and cyber squatting.

e. Dance

• Creative Station adv. Apple Seeds. US DC SDNY Advise “teach kids to dance” school re copyright litigation and commercial agreements related to licensee

f. Wireless

• General Magic adv. Consolidated Freightways. Advised Apple, Inc. spin-off re commercial licensing of its hand-held device.

• AD USA v. Automan. US DC Pennsylvania. Obtained preliminary and permanent injunction on behalf of handheld computer manufacturer in automotive industry. Resulted in significant financial settlement on behalf of client.

g. Sculptural Works

• Ohtake adv. Sculpturesite Gallery. Defended allegations of breach of contract related to sale of kinetic sculpture.

• Rader v. Sutter. US DC ND. Prosecuted TRO and pursuit of preliminary injunction in copyright infringement claim on behalf of cemetery monument design company. Case proceeded through death threat allegations, expedited discovery and an appeal to the 9th Circuit for relief. (Judge Susan Ilston)

h. Software

• PC Tools v. Contour/Elle Mae, Inc. AAA San Francisco. Successfully brought copyright infringement claim on behalf of mortgage industry software developer. Resulted in six-figure settlement in client’s favor.

• Workshare v. Litera Corp. US DC ND. Successfully defended document management software co against injunctive relief action for copyright infringement.

2) Patent and Trade Secret litigation

• Patentee v. L-3 Corp. US DC Georgia. Defended owner of multiple power utility sites from allegations of patent infringement over payment process method.

• Datapark v. GMG Systems, Inc. San Francisco District Court. Successfully prosecuted misappropriation of trade secrets related to parking garage computer equipment through three defense firms. Resulted in six-figure settlement for client.

II. Fraud litigation

• Sisters v. Brother in Family Partnership. Defended and advised brother/general partner in breach of fiduciary duty suit in LA Superior court alleging misuse of partnership funds, self-dealing.

• Shareholders v. NiftyNet, Inc. US DC ND. Successfully brought derivative action against former President of Delaware corp. on behalf of shareholder/director alleging fraud, corporate waste. Resulted in redemption of shares and a significant financial settlement for client (Judge Charles Breyer)

• Does v. Real Estate co, Inc., and President/director – San Francisco Superior Court. Defense of the President of commercial leasing agency in five separate actions alleging fraud and negligent supervision allegations by investors in multi-unit properties.

• Insurance brokerage v. Former partner– San Francisco Superior Court. Pursued computer fraud and abuse and trade secret misappropriation against former partner of general insurance broker. Resulted in financial settlement.


3) Online Torts

• CPA v. Yelp and anonymous poster. Advised CPA firm re: pursuit of claim against anonymous user on Yelp re: negative services. Consideration of privileges and “opinion” defense. Obtained a retraction by user to be less offensive.

• Jane Doe v. Armando Aguilar, LA Sup. Ct. Prosecute case alleging false light, invasion of privacy, and intentional infliction of emotional distress re: release and publication of sex tape and online harassment.

III. Anti-trust litigation

• Weinberg v. Ingenix. US DC, Connecticut. Participating plaintiffs’ counsel in class action claim of price fixing and unfair trade practices against Cigna, Wellpoint and Aetna.

IV. Outside General Counsel

• Galligani-Eslinger Productions. Outside general counsel to reality television and motion picture production company.

The 4 Best ‘Newly Discovered’ Reasons You Should Sign That Important Contract

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I. The 3 essential issues most negotiators miss (most of which you’ve never cared about before…) that other top-preforming businesses owners tend to gloss over until there is a problem.

  • Your Maximum Gain and Maximum Exposure.
    • Do you know the most you can obtain, win, earn, pay from the contract you are about to sign?
    • What is the one-line (or one word) worst case scenario?
    • What is the other side’s answer to this same question?
    • What does the agreement say about the limitation of liability?
  • Are you Crystal Clear About What You Are Obligated To Deliver Under the Agreement and By When? What About the Other Party?
  • If You Or They Do Not Perform, What Is Your Remedy? 
    • Let’s say you’re negotiating a services agreement (cloud management services, architecture services, any services).
      • What happens if you do not perform? Is the first thing that happens a lawsuit? Doubtful. What do you do to (a) confirm that the deliverable is completely satisfactory; (b) to repair any part of the service deliverable that is not satisfactory? (c) Even if it is not in the terms of your agreement, what is your plan/policy/practice to solve this issue?
      • Quick Story on Microsoft: Early in my training I negotiated a multi-million dollar revenue transaction for cloud services with Microsoft.  Microsoft’s total liability was $999 – the cost of one copy of their server software – under the agreement no matter what. Since we knew that from the beginning, we had to understand that our ability to recover if something went wrong was $999.  Problem was: we needed the agreement. Does that info change your negotiation approach?   
  • Bonus: How Much Do You Know About The Otherside’s Ability To Solve Problems that Will Occur? 

II. The #1 best use of your negotiation time (and a strategy that you can implement in 30 minutes or less) to immediately make you less risk exposed.

  • Flush Our the Duck. You need to find leverage.  Leverage comes from information. It is often said that the first to speak loses. That is not true.  If you ask more questions than the other side and learn more, you win. The key is knowing exactly what answers you NEED (not merely want) to know. If you become smarter after you speak to the other side than you were before, then you might gain leverage.

III. The 5 pieces of information you need before you spend any time negotiating with anyone over money.

  • Does the person on the other side have authority to make the changes and negotiate the issues you are discussing?
  • Do you know exactly what you will do if the agreement negotiation is aborted by you or the otherwise? (ie, if you agree not to move forward?)
    • For example, if you are making an offer on a piece of real estate or software, do you have a second, third, fourth choice? If the deal is critical, I recommend having at least two back-up plans.

IV. The #1 best question to ask your lawyer to see if they are a fit for you.

I encourage my clients to ask me hard questions.  One of the hardest questions to answer is “have you worked on the exact same type of deal like mine before?”  Even though it is hard, is can be answered. Here is  – in my opinion today – the number one best question to ask your lawyer to see if there is a fit.  But before I give you the question, you must be willing to hear the answer. And the answer might be essentially back on you, the client.

“For the next ten minutes, please ask me every question you can think of so that you, attorney, can understand exactly how I make money and the risks I take to deliver on my business promise?”

I am amazed how little attorneys often know about their client’s businesses until they are in the midst of a crisis.  I am also amazed by how willing clients are to get help to clearly explain what they do, to get help uncovering potential problems in their delivery of what they offer and in identifying the barriers to growth.

What is your number one burning question?  Email me

Thanks!