In fiscal year 2011, the federal government awarded more than $91.5 billion in federal contracts to small businesses. An additional $90 billion was awarded to small businesses by federal prime contractors in subcontract awards. Although government contracts represent a tremendous opportunity for small business, the legal issues can be complex and unique. This course covers the legal needs of small business at various stages of the procurement process and examines how small business lawyers can most effectively evaluate and analyze the issues and risks on behalf of the client.
FINE-TUNED TO BUILD SKILL AND EXPERTISE.
The delivery of legal services online is now accepted as a part of the future of the legal profession. In the next five to ten years all law practices will need to offer clients some form of virtual delivery in order to remain competitive. Consumers are actively seeking online legal services just as they conduct other business online, such as shopping, banking, investing, earning degrees, or paying their taxes.
In the past, online legal services companies, such as LegalZoom, were the primary option for many members of the public seeking online legal assistance. However, the services provided by these companies do not include review of the work by a licensed attorney. To meet this market need, attorneys and law firms in increasing numbers are creating completely web-based virtual law offices or integrating a secure online client portal and virtual law office into their traditional law practice.
Operating a virtual law office requires knowledge of the unique ethics issues and best practices for use of the technology to deliver legal services online to clients. This course will cover the following topics to prepare the student responsibility practice law using a virtual law office. Topics will include:
- Structures of virtual law practice
- Technology overview; legal SaaS and cloud computing
- Unbundling Legal Services
- Launching a virtual law office
- Marketing a virtual law office
- Ethics Issues
- Working with virtual assistants and virtual paralegals
- Best Practices
- Virtual lawyering in the future of law practice
Small businesses operating outside a home typically lease the commercial real estate they occupy. Some small businesses are themselves in the business of leasing real estate. The costs and risks for both the lessee and lessor can be high, and effectively negotiating and managing the many variables of leasing often affects profitability. Critically important variables include the role and rights of the third essential player in the commercial real estate lease: the lender that loaned the money for the purchase or development of the space the tenant leases and that holds an interest in the space and also the rents and profits to secure the loan and related advances. Understanding the law of commercial real estate leasing, from the perspectives of tenant, landlord, and lender, is an important qualification for the small business lawyer and a large part of their value to small business clients.
This course also provides a contained environment to study both the mindset and skill set of a successful transactional lawyer. Students have the opportunity to examine the motivations of the parties to the commercial lease transaction, evaluate the language that comprises the critical provisions that make up the lease, analyze the substantive law that lies in back of these contractual provisions, and apply this knowledge to true-to-life fact sets and problems. In addition, the ethical issues that commonly arise in transactional practice will be covered. Most course segments conclude with an opportunity to apply the material to a form “Killer Lease.”
The course is organized around common, fundamental parts of the typical commercial real estate lease, including:
- Premises descriptions
- Definitions of critical, controlling terms
- Rent provisions
- Permissible and prohibited uses
- Warranty-like provisions
- Transfers-assignments and subleases
- Maintenance, repairs, alterations
- Building services
- Insurance and utilities
- Default and remedies
- Subordination and estoppel
This chronological focus on the core legal issues of each part of the lease also provides opportunities to not only explore transactional practice generally but also to learn two central lessons to good transactional practice. First, the skills that make a good lawyer (drafting, negotiation, and review of documents) cannot be separated from a sound understanding of the substantive law. Accomplished transactional lawyers keep the present state of the law and trends in the law in mind when deciding which rights to trade away during negotiation. Second, good transactional lawyers thoroughly understand the meaning and impact of each provision in the documents that embody the deal, which explains why the course and the course materials are document driven. In this and every other respect, this course runs on practice as much as theory.
Other subjects of special interest and importance to small business are also covered, including: bankruptcy of the landlord or tenant; shopping center leases; percentage leases; and leasehold financing.
Disputes about the management of employees are among the most common source of litigation for small business. The legal issues mainly concern the legal limitations on an employer’s discretion to hire, fire, direct, and otherwise manage the work and other conduct of employees. For the small business lawyer, a principal concern is the extent to which the employer can effectively use contract or other means to reduce or eliminate these limitations and thereby increase management creativity and flexibility. The issues include:
- disciplinary action
- employee privacy
- Employee Polygraph Protection Act
- employer privileges for communicating employee information
- employment agreements
- employment at-will/wrongful discharge
- enforceability of employee handbooks and other employer management regulations
- federal anti-discrimination laws
- human resource policies and practices
- layoff, reduction in force, and termination (separation) of employees
- monitoring the workplace and testing (including drug and alcohol testing) and investigating employees
- non-compete agreements
- restrictive covenants and confidentiality agreements
- state and local anti-discrimination laws that are more protective than federal laws
- trade secret laws
- whistleblower protection
The importance of these matters to small business is often greatly amplified by the closeness of relationships in the workplace and the absence of full-time professionals constantly managing human relations.
Integrally related to issues of management are matters affecting employee benefits. Employee benefits are commonly defined in terms of direct, financial incentives or financial insurance for sickness, disability, unemployment, retirement, and the like. Legally, employers are only required to provide workers’ compensation insurance and pay and withhold FICA and payroll taxes; but competitive, social, and ethical forces urge all businesses, including Small Business, to provide additional, voluntary benefits. The costs of these benefits are high. The U.S. Chamber of Commerce estimates that the average benefit package is worth more than one-third of wage compensation. The costs of health care benefits are the highest among the smallest companies.
Whether these employee benefits are required by law or provided by choice, the costs include compliance with attendant, complex, legal obligations. The costs of legal compliance grow quickly and burden Small Business competitiveness absent partnership with a Small Business lawyer insuring compliance with statutes, including the Employee Retirement Income Security Act (ERISA) and related provisions of the Internal Revenue Code, as unendingly supplemented by rules and regulations from agencies including the Departments of Labor and Treasury, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC).
ERISA covers employer-sponsored and participant-directed retirement plans and also, to some extent, employer health care plans and other employee benefits. Principal ERISA topics for study include how Small Business defines and satisfies fiduciary duties and how Small Business lawyers limit and manage litigation, which often includes issues of discrimination law.
This course study also covers the alphabet soup of other laws that add to federal compliance requirements for employer health plans, such as: COBRA (Consolidated Omnibus Budget Reconciliation Act), OBRA (allows disabled employee to continue health coverage after COBRA), HIPAA (Health Insurance Portability and Accountability Act), NMHPA (Newborns and Mothers' Health Protection Act), MHPA (Medical and Health Care Continuation Act), and WHCRA (Women's Health and Cancer Rights Act).
Employee benefits often overlooked also include legally mandated, employee rights, privileges, and protections which flood Small Business under extensive, complex laws such as: Fair Labor Standards Act; Family Medical Leave Act (FMLA); Health Insurance Portability and Accountability Act (HIPAA); Migrant and Seasonal Agricultural Worker Protection Act (MSPA); Occupational Health and Safety Act; Older Worker's Benefit Protection Act; Uniformed Services Employment and Reemployment Rights Act (USERRA); Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA); and Worker Adjustment and Retraining Notification Act (WARN), as well as workers’ compensation laws. These kinds of “benefits” more widely affect Small Business, and the effect is amplified (and the costs to Small Business are compounded) by similar or related state and local laws that enlarge employee rights, privileges, and protections.
This course focuses on the scope of these federal and state laws (as much or more than employee welfare benefits) and the exceptions so that small business lawyers understand when the laws apply, and how best to comply with them. With respect to all employee benefits, this course emphasizes compliance equally with applicability of the law. Both dimensions of knowledge may increase the value that lawyers can add to small business, decrease the costs of small business, and help make small business more competitive with large firms.
Because issues of employee benefits and management are so closely related in business and handled conjunctively by Small Business owners and their lawyers, this two-semester course organizes and integrates the two subjects around common dimensions and themes of the Small Business workplace, rather than segregating management and benefit topics in two, independent courses. It is important that the small business lawyer understand the interconnectedness of the subjects.
Large, publicly-held companies often dominate the headlines. However, small business is as important; the number of small businesses is vastly larger; and many more lawyers deal much more often with small businesses, not big business. Small businesses are closely-held rather than publicly-held. Closely-held means: the number of owners is small; ownership interests are not publicly traded on an established market; and, the owners take a more active role in the management and operation of the business. Because of these differences, significant problems may arise in the closely-held context that are absent in the publicly-held setting.
For example, in many closely held businesses, the lack of a market effectively results in the lack of an exit for investors who disagree with the majority will and who would prefer to liquidate, or "cash out," their investments. The investment of an owner, in other words, can remain trapped within a closely held enterprise -- a situation that may call for judicial intervention, particularly if egregious majority conduct is involved. The lack of a market also increases the importance of other mechanisms for monitoring the managers of an organization, as the disciplinary effect of a market is, by definition, absent in a closely held business.
Also, the owners of closely held enterprises often expect to run their businesses in ways that differ dramatically from the operation of publicly held enterprises. For example, closely held business owners may want an active role in the management of the venture and restrictions on the transferability of ownership interests, in part because ownership and management rights may be linked in such ventures. Similarly, owners of closely held businesses are frequently connected by family or other personal ties, and there is often a desire to prevent "outsiders" from joining the organization. In publicly held entities, however, free and unrestricted transferability of ownership interests is the norm.
In combination, the number of closely held enterprises, the issues that uniquely affect closely held ventures, and the differing expectations of closely held business owners explains why the curriculum includes and begins with a separate course in closely-held business organizations. The course touches on publicly held entities, but the focus is on the operation of closely held businesses and on the problems that such businesses commonly encounter in their typical forms, which are: the general partnership, the close corporation, the limited partnership, the limited liability partnership, and the limited liability company. Thoroughly covered, too, are basic agency principles which are the building blocks for many of the legal doctrines associated with these typical business forms.
All enterprises operate as both creators and consumers of materials protected by intellectual property law. Websites, marketing brochures and advertisements are protected by copyright; company names, brands and logos are covered by trademark; software, hardware and processes utilize patents; trade practices, innovation, client information and know how are governed by trade secrets; and the use of names and likenesses are regulated by state publicity rights laws.
Because intellectual property rights provide exclusive ownership of critical strategic assets, these rights provide small business the potential to level the playing field with their multinational rivals. Google, Microsoft and Apple each started as a small partnership that leveraged innovation and intellectual property rights to challenge the market leaders.
The course provides an introduction to copyright, trademark, patent, trade secret law, publicity rights, and data management (related to intellectual property) with an emphasis on how these fields affect small business transactions. The course materials are inherently comparative in nature, allowing you to see how very different legal doctrine can be used separately or in combination to maximize business opportunities and manage business risk.
The objectives of this course are (i) to review the substantive areas of intellectual property law and the concepts related to the creation and legal protection of intangible property rights; (ii) to expose you to a complex federal statutory code and develop the skills of statutory analysis; (iii) to develop an appreciation for the impact of federal rule-making on private commercial transactions; (iv) to develop an understanding of business best practices regarding the creation and protection of intellectual property rights; and (v) to develop an understanding of best practices regarding use intellectual property based transactions.
Generally, each subject matter is covered in multiple modules. In the first module, you are responsible to review the basic legal rules governing the legal rights protected by the doctrine, including:
- Identifying the method of originating the protected work.
- Securing legal protection, by registration or otherwise.
- Policing or enforcing the rights in the marketplace.
- Avoiding infringement of other rights holders.
- Navigating legal pitfalls that would result in the rights being extinguished.
In the last module on each subject matter, you will receive a transaction packet. Working in teams, you will negotiate and draft agreements to complete a transaction with representatives from another team to complete an assigned transaction. The transactions may be cumulative in nature, so negotiations in latter modules will include rights covered earlier in the semester. You will be expected to:
- Identify the objectives of your client based on their economic relevance.
- Suggest the best intellectual property tools to achieve client goals.
- Reflect the goals of your client in a sale, policy document, license or other agreement.
- Understand all the provisions of the agreements to which your client is a party.
- Avoid contractual provisions that would undermine your client’s interests.
Fundamentally, business is exchange based on the sale of goods and services governed by contracts between buyers and sellers. Increasingly, trading partners and operating efficiencies require Small Business to contract electronically. To survive and grow, small business must participate in wider domestic markets and in the entire global marketplace, and they are doing so already. “Collectively, 239,287 small businesses are known to have been involved in the export business in 2006… These companies constituted 97.3% of all known exporters, and they engaged in $260 billion in known transactions….”
Relatedly, small business owners believe that using technology to buy and sell gives them a competitive advantage in the world market. In widening their markets, small business is unusually dependent on e-commerce, which means marketing, trading, and paying on the Web. Indeed, for any type of business to “experience significant economic expansion, there is a need…across the country to rapidly adapt…by utilizing technology and e-commerce.” For some domestic and international sales, the processes of buying and selling and making the contracts to sell are completely digital and occur “in the cloud.” In addition to widening markets, technology and e-commerce may significantly help cut the costs of business by reducing transaction costs and enabling small business to more efficiently manage supply chains.
Several years ago, the legal business itself began moving to the Web. Law firm websites market to prospective clients and provide a widening range of services to existing clients. Some sites allow clients to log in and track the progress of their case or work product, or to help produce documents online. To aid in large commercial transactions, some firms now utilize secure, online document databases to disseminate confidential information to people doing business with clients. Similar software programs assist firms and their clients with electronic discovery. Some sites prescreen interested clients through a basic interview process. For the most current news, attorney weblogs address hot topics on a daily basis. These and many other uses of the Internet are furthering the evolution of “cyberlawyering,” helping lawyers and business clients work more efficiently and effectively.
Robust cyberlawyering, however, is mainly limited to large law firms representing mostly large businesses. Small business has not significantly experienced the benefits and cost savings of functionally networking with their lawyers in cyberspace. Their lawyers need to learn how to help clients do business electronically and on the Web, and how to usefully, digitally, profitably connect themselves to their clients.
This course focuses on how these modern processes work in small business and also teaches the growing bodies of new American and international law that governs Internet selling, electronic data exchange, electronic payments, and digital signatures, that, help define the future of contracting and commerce for small business. The course also explores the ways and means of managing law office practice to provide services electronically to small business clients consistent with best practices and professional ethics.
 Chad Moutray, Looking Ahead: Opportunities and Challenges for Entrepreneurship and Small Business Owners, 31 W. New Eng. L. Rev. 763, 775 (2009).
 Ralph A. Pope, Why Small Firms Export: Another Look, 40 J. Small Bus. Manag. 17 (2002).
 Prashanth Nagendra Bharadwaj and Ramesh G. Soni, E-Commerce Usage and Perception of E-Commerce Issues among Small Firms: Results and Implications from an Empirical Study, 45 J. Small Bus. Manag. 501 (2007).
 Justin D. Leonard, Cyberlawyering and the Small Business, 7 J. Small & Emerging Bus. L. 323, 339 (2003).
In 2008, the total cost of tort liability in the United States was more than $255 billion, which is equivalent to an $838 yearly tort tax on every American or $3,340 for a family of four. Another study puts the cost at $9,827 for a family of four if all the indirect costs are included. Higher levels of tort cost growth are forecast for 2010 and 2011.
Since 1990, commercial torts against business have increased more than personal torts against individuals, and Small Business bears a disproportionate amount of liability costs. It is the small business — perhaps a family-run business or a tech startup or a local business employing a handful of people — that bears the biggest burden.
Amazingly, small business bears 69% of commercial tort liability, paying $100 billion in tort costs per year. Very small businesses, those with less than $1 million in revenues, pay $31 billion in tort liability costs. The cost of the tort system to individual small businesses is $20 per $1,000 of revenue. In other words, a small company with $1 million in annual revenues will pay, on average, $20,000 in annual tort related costs. Equally amazing, most small businesses pay these costs with their own business assets, not with insurance.
A single tort suit can cripple a small business, especially a self-insured business. It is no wonder that more than three-quarters of small business owners say they are concerned about the threat of unfair lawsuits; eight out of 10 say that lawsuits or the threat of them has increased; and more than 60% say that the mere threat of lawsuits is a factor in their decisions to lay off workers, reduce employee benefits, or raise prices. Litigation costs alone for a single case range from $3,000 to $150,000. And, the SBA reports that these lawsuits exact an undue emotional toll on small business owners who are personally invested in their firms’ operations. Litigation causes substantial emotional hardship and often changes the tone of the business.
Increasingly, the plaintiffs in tort suits against small business are other businesses (often, big businesses) making tort claims to recover economic, business damages. These business-versus-business tort claims are often called economic or business torts and are increasingly based on state law, not federal law. Business torts include an ever lengthening list of civil wrongs, such as:
Abuse of process
Breach of Fiduciary Duty
Fraud and fraud in the inducement
Interference with contract
Interference with prospective economic advantage
Misappropriation of trade secrets
Negligence and negligent misrepresentation
Slander and slander of title
Trade libel or disparagement
Trade name infringement
Unfair competition and trade practices
Typically, these business lawsuits are intentional torts because the defendant intentionally caused some harm to the plaintiff. These cases do not necessarily involve injury directly committed against a person or property, but rather involve losses related to intangible business assets, including economic interests, business relationships, and assets of good will and business reputation.
In Concord’s Small Business Practice LLM program, the Business Torts course focuses on little else but is not limited to torts arising out of competition between business. High-risk areas of liability are also covered, including important bases of tort and tort-like business liability to consumers such as: premises and products liability claims and consumer liability for false and deceptive trade practices under state, “baby” FTC laws which give individual consumers the right to sue.
Also covered is criminal liability imposed on business owners and managers for tort-like, business-related conduct. Criminal liability is not limited to persons who themselves commit occupational fraud. Criminal liability in business is much wider and reaches as far as vicarious-like criminal liability for the unknown conduct of employees who violate environmental and other public welfare laws.
The course also covers the tort liability of business people who provide services, especially including heath care providers, clergypersons, and lawyers. The risk of malpractice liability for lawyers representing small business may be amplified because of their larger roles in the business and closer connections to the owners and employees.
 2009 Update on U.S. Tort Cost Trends (Towers Perrin).
 Jackpot Justice: The True Cost of America’s Tort System (Pacific Research Institute 2007).
 2009 Update on U.S. Tort Cost Trends (Towers Perrin).
 U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Business (May 2007).
 SBA Office of Advocacy, Impact of Litigation on Small Business (Oct. 2005).
 U.S. Chamber Institute for Legal Reform, Tort Liability Costs for Small Business (May 2007).
 SBA Office of Advocacy, Impact of Litigation on Small Business (Oct. 2005). An average civil case can cost $50,000 to $100,000 to litigate through trial exclusive of appeals and any judgment.
 Oshman & Mirisola Business Litigation (http://www.oshmanlaw.com/business-litigation.html).
This course covers the tax consequences of forming, operating, and transitioning small businesses, with a focus on the legal forms most often used, including partnerships and LLCs. Topics include organization and operation of small businesses, distribution of assets, and succession. Students explore the effect tax law has on business and economic decisions, such as choice of legal entity, forms of compensation, modes of distributing assets to enterprise owners. Significant time is reserved for detailed and practical analysis devoted to small business income and small business exclusions and deductions and everyday issues concerning about hardware depreciation, excess inventory, and writing off business related debt. Equal time is given to the personal tax issues of small business owners and their families and the mechanics of documentation and record keeping to maintain the separation of business and personal taxation. Included, too, throughout the course, are segments highlighting the related and different tax issues affecting home-based businesses and their owners.
Among the top 15 MSAs, the number of small business bankruptcies increased more than 10% from 2009 to 2010. The primary reasons for small business bankruptcies are:
• Outside business conditions: competition, insurance, general costs.
• Financing: loss of capital, inability to secure new capital, high debt.
• Inside business conditions: management mistakes, location, loss of clients.
• Tax: problems with the IRS.
• Disputes with a particular creditor: foreclosures, lawsuits, contract disputes.
• Personal: illness and divorce.
• Calamities: fraud, theft, natural disasters, accidents.
Lawyers for small business should understand all these causes, how to minimize them, and how to mitigate their effects by taking advantage of innovative bankruptcy strategies, including creative use of Chapter 13 for sole proprietorships.
Additionally, small business lawyers should fully understand the relationship of state debtor-creditor law to bankruptcy. Because of changes in the Bankruptcy Code, as well as changes in the economy, small businesses are finding in more and more cases that bankruptcy may not provide the answers to financial distress. In these cases, to protect fully the interests of the small business, lawyers need to know much more about the relevant state law than the anecdotes and cursory references. Non-bankruptcy, debtor-creditor law has also been affected by underlying revolutions in society, culture, and the economy caused by technology, mobility, and globalization. Because of the scale of these developments, their fundamental effect on the interpretation and application of bankruptcy law, and how they historically complicate the relationship between state and federal law, studying and learning non-bankruptcy debtor-creditor law is more important than ever to understanding bankruptcy.
The content of this course is therefore comprehensive, covering equally bankruptcy law and state laws that the lawyer must know and use to avoid bankruptcy or make it more useful for small business clients.
 SBA Study “Financial Difficulties of Small Business and Reasons for Their Failure”
New lawyers may be surprised to learn that the practice of law is not only a profession, but also a business. For a solo practitioner or a small firm practitioner, this may seem overwhelming, as practice management skills may be overlooked in law school. This course explores the ways and means of managing a law office practice to provide services to small business clients, consistent with best practices and professional ethics, including study of marketing, management, technology, and finance. Special attention is given to the use of emerging technologies for the solo and small firm practitioner in compliance with ethical obligations.