Last week I wrote an article for my AllBusiness.com Business Law blog titled “How you frame the legal issue matters.”  Yesterday, I read how Joe Halderman, the TV producer who allegedly tried to extort money from David Letterman is now claiming the alleged shake down was really offering Letterman the right of first refusal to the future screen play, not blackmail.  As a result, defense counsel is claiming the case should be dismissed because it was a commercial transaction, not a crime.

It just goes to show you how there are as many sides to a story as there are people involved with it.

The court is expected to rule in January.  What do you think? Crime or deal making?

Copyright © 2009 Corporate M.O., LLC

Doing business outside of your home country always presents a special challenge.  Besides language and cultural barriers, you may also encounter unexpected legal hurdles.  The rule of law may be less developed than you’re used to.  Contracts may be viewed as more fluid and less enforceable than you’re used to, and concepts you may take for granted might not exist.

Take for example the sales office a U.S. company was trying to establish in Malaysia.  The location was chosen, the job candidates were narrowed down, and then it came time to present an employment offer and contract. 

 The U.S. based executives driving the project framed the employment package in terms of salary and benefits.  Luckily, they had the benefit of local counsel who advised them that “salary” is viewed differently in Malaysia – even “salaried” employees are entitled to overtime.  That one piece of information helped management retool the job offer and avoid a nasty budget surprise.

Western companies and their manager often experience culture shock when doing business abroad, particularly in Greater China.  It’s a learning experience.  Mike O’Neill, general counsel of Lenovo recently wrote:

I realize that the big challenge in China is to have the humility to recognize what I don’t know.  We cannot assume that lessons learned elsewhere will apply in China; or at least, they certainly will not apply in the same way.

To help you bridge the knowledge gap and avoid the School of Hard Knocks, I invite you to join me on July 22^nd at 8 pm Eastern (5 pm Pacific) when I interview international lawyer Nicholas V. Chen, a partner in the Pamir Law Group,  on Ask the No Nonsense Lawyer teleseminar about the legal aspects of doing business in Greater China.   

Nic is a U.S. trained lawyer who has been traveling and working in China since 1973. He has helped hundreds of businesses successfully bridge the cultural gap, completing hundreds of foreign investments into China and many PRC cases into North America, Latin America, Europe and Africa.  He has also been named a Leading Lawyer by Asia Law and Practice Magazine and is an arbitrator for China International Economic Trade Arbitration Commission.

To learn more about the program and obtain a free registration to this special teleseminar, click here and submit a question you’d like me to ask Nicholas V. Chen about doing business in Greater China.  The website will then direct you to the call-in information page that includes your pass code (please note that there may be a small phone charge depending on where you are calling from). 

Please print that page and post it in a conspicuous spot as a reminder.  Space is limited, so please reserve your “seat” today by clicking here now.

We look forward to having you join us!

©Corporate M.O., LLC 2009

A tip of the hat goes to the law firm of Howrey LLP who announced a new apprenticeship type program for new associates.  More specifically, program aims to train the novice lawyers on the firms’ dime, not the clients’.  That’s great news for client budgets . . . and for the associates who will be more likely to hit the ground running when they are turned loose. 

I give that initiative two thumbs up!

In a classic example of what not to do, fellow blogger Michael D. Young tells how iFreedom Communications International Holdings Ltd wound up with a whopping $4.1 billion arbitration award against it in a case involving the termination of a senior level employee without cause.  That’s not a typo.  Seriously, its billions with a big bucks capital B.

In an interview on the topic with the National Law Journal, Young explains how iFreedom ended up on the nosebleed section and had the arbitration award affirmed by a Los Angeles Superior Court judge.  It makes for interesting reading and offers some great legal literacy lessons:

1. Legal literacy lesson #1: Arbitrations are not dress rehearsals.  They are the real deal and can be as binding as a jury trial, if not more binding.  After this decision, you’re bound to see more arbitration clauses including a right of appellate review.

2. Legal literacy lesson #2: fail to produce requested documents at your peril.  If you watch a lot of TV crime dramas and think you have the right against self incrimination — you’re absolutely right — in a criminal case.  But in a civil context, you do have a legal duty to produce self incriminating documents and if you don’t produce them the law rightfully assumes you failed to do so because they’re highly incriminating.  That means ”they can’t prove it” can work against you the same way those missing minutes did on the Watergate tapes. 

Here the defendant failed to produce requested financial information.  The financial data was important because the plaintiff’s compensation agreement said he was going to be paid a commission of 5% of gross sales.  There was also a sweetener in the agreement that provided for commissions to be paid on an ongoing and permanent basis if the employee was terminated without cause. 

Without the company’s financial documents, the arbitrator and the plaintiff looked to available public information about the company’s sales.  What they found was a letter iFreedom sent to its shareholders announcing a monthly revenue of $535,000 and a growth rate of 10% per month.  The information caused the numbers to multiply into the eight figure range very quickly.

3.  Legal literacy lesson #3: know the rules.  Not knowing that negative inferences could be made in a civil case from missing evidence probably had a lot to do with the fact that iFreedom fired its attorney and the owner elected to represent the company.  If you don’t know the rules of evidence and of court, it’s probably best you hire someone who does to represent you.

4.  Legal literacy lesson #4: recognize when you’re in over your head.  One of the challenges of any leadership position is to “know” your limits and what’s outside your area of expertise.  This is a corollary to lesson #3.  When faced with a legal issue, particularly a lawsuit, you need to be represented by competent counsel.  A lawyer would have been able to advise iFreedom about the potential for punitive damages that could, and in this case did, triple, the underlying base award — and that’s how it got to $4.1 billion.

5. Legal literacy lesson #5: check your ego at the door.  Don’t have a hissy fit and not show up at the arbitration the way iFreedom did.  Putting your head in the ground ostrich style only make your hind quarters stand out as a bigger target than it already is.

Avoid iFreedom’s pitfalls and you’ll put yourself and your company in a more defensible position.