Choice of Law in a Shrinking World

Thinking Outside the Box
by Guest Columnist
Christopher Dorman
Partner
Phillips Lytle LLP
New York, NY

So often we hear about the world getting smaller. Sounds trite, but it’s true. New technologies make communication accessible and easy, transportation, likewise, more available and faster. Familiarity among diverse cultures is growing. Whether a cause or a consequence of these phenomena, cross border transactions are more common than ever.

Wherever you are doing business you’ll need to choose law to govern your business deals.

The legal systems of New York and England are common choices for good reasons. They are both commercially sophisticated and efficient in terms of execution of contractual rights and remedies. But, while both systems share much in common, and are two of the most prevalent choices of law in international business deals, they are different systems.

When is one more appropriate than the other for transactions? The answer may depend on your goals.

For example, New York allows a lender to take security and perfect on receivables without taking full dominion. But in England certain case law indicates taking dominion fundamental to perfection. In the realm of bankruptcy, however, the time it typically takes for a lender to realize its remedies is swift compared to the U.S. where bankruptcy (besides being governed by Federal law) is often a drawn out process.

So what’s one to do when involved in international transactions and the parties are considering having the contracts governed by New York or English law? The answer will depend on many factors, such as: (i) are goods being imported or exported, (ii) if lending where’s the location of debtor and collateral, (iii) are other laws in issue (i.e. EU employment laws), and (iv) do the parties wish to be governed by arbitration and, if so, which arbitration regime?

If you play in this arena and it’s more likely than ever that you do, while not intended as legal advice, here’s a few tips:

1. Always consult local counsel. (In New York, a lawyer. In England, a solicitor – no, they are not those people who wear the wigs.) ;

2. Ask about the appropriateness of arbitration (will a decision stick?), what are tax consequences, employment rights, export regulations and how does the Convention on the International Sale of Goods, which unless opted out of, automatically alters certain provisions of the Uniform Commercial Code for contracting States of which England is not:

3. If you’re a creditor, drill down on how collateral is treated in the jurisdiction of your customer – e.g., taking security in various types of collateral, perfection rules and foreclosure rights.

Please send posts or tweets to us if you have any comments or questions for Christopher Dorman.

Articles of Interest

The Perils of Market Research
by Steve McKee
Published: March 12, 2010
BusinessWeek
http://www.businessweek.com/print/smallbiz/content/mar2010/sb20100312_705320.htm

It can be a powerful weapon in any company's strategic planning arsenal. But it can also backfire. Steve McKee offers five essentials to consider.

1. There are things you can measure and things you can't. Don't mix them up.
How much do you love your wife? What's the value of poetry? What is a life worth? Ask most people these questions, and you'll get a funny look—or get into a metaphysical discussion. Some things just can't be quantified. Yet in business, we often act as if everything can.

In a 2008 Wall Street Journal story, Adrian Van Hooydonk, director of design at BMW (BMW:GR), explained how the carmaker evaluates vehicle prototypes: "We don't use customer clinics. They will be judging it based on the world today. Design needs to look good in eight years' time. You can't ask a customer whether he will like the design of the car in 2018." Van Hooydonk and his team must be onto something, because BMW has arguably been the most stylish and best-performing car company of the past two decades.

Research can't predict the kind of cars we will be interested in five years from now, how an ad concept will be received three months from now, or what the next hit movie or popular fashion trend will be. Yet we still hold onto hope that somehow statistics and spreadsheets will enable us to foresee the future. They won't. They can't.

Of course, it is possible to track events that have already happened, and that can provide valuable information. Such things as purchase patterns and visit frequency are historical, concrete events subject only to the laws of forgetting (I may not remember how I heard of your product) and deceit (I may not want you to know that I saw your ad in my wife's Glamour magazine). By and large they can be reliably tracked. But when we try to quantify attitudinal attributes—or assume that the past will accurately predict the future—we can get into trouble.

Welcome To The New Normal

3 Tips for Changing The Way You Promote Your Not-For-Profit Or Charity Using Social Media

Post, tweet, share with us what you would like to know. The "Minding Your Business" column will also recommend business solutions to you. Just ask - send us a post with your questions.

Minding Your Business
Column by Kathy C. Yohalem - Strategist and business advisor for not-for-profits, and many other industries

1. Social media is a conversation or dialogue - the conversation is a 2 way dialogue.
• Engage your members, followers or constituents.
• Be interactive - ask your followers for suggestions and feedback.
• Create a personal connection - fans are loyal, they will keep coming back.
  


2. Don't just sit there - be active and responsive.
• Respond a few times a week to your constituents.
• Keep your posts updated and respond to tweets within 24 hours.
• Create an environment where sharing is valued.


3. Social media has in its power - to share and spread information quickly to increase your reach to new audiences.

Share your suggestions, comments, or any tips that we can share with others....

...sharing is valued.

What You Should Know About Choosing and Setting Up Accounting Software

Thinking Outside the Box
by Guest Columnist
Laurence Scot
Co-Managing Partner
Skody Scot & Co, CPAs
New York, NY
Author of Simplified Guide to Not-For-Profit Accounting, Formation and Reporting

Most business people today understand that accounting software is important and necessary to properly track, and report on an organization's financial activities. But what software to use and how to configure it is a mystery to most people, even to many accountants. This mystery is compounded by common misconception such as - all programs are created equal (with the exception of cost) and what's good for one type of business is good for another type; Or, anyone who's computer literate can install/setup a properly configured accounting program; and, accounting systems and chart of accounts are easily modifiable and changeable in the future.

It's safe to say (and an undeniable fact) that an organization's accounting program is the bedrock or "foundation" from which all financial activity and reporting flows. If it is flawed, financial information will not be easily available and management will lack the tools to make informed and timely decisions. In the author's opinion, based on 30 years experience, a significant number of organizations under-spend on accounting software, software design and software training. Many times the cause is simply a lack of money, but in numerous other cases the cause is lack of knowledge or expertise in understanding what is involved, or lack of time to properly evaluate or design/configure the software and char of accounts. To borrow an old phrase, an ounce of prevention is worth a pound of cure. This aptly applies to purchasing and configuring accounting software. To avoid or significantly reduce future problems, the following suggestions should be followed.

• Evaluate your current and future reporting needs through discussions with all major accounting software users (e.g. president, controller department heads).
• Evaluate at least two different accounting programs either through vendor demonstrations or by reviewing evaluations copies. It is imperative that a technically competent individual be involved in the evaluation process.
• After purchasing the software, spend time with all key users to develop an appropriate chart of account structure.
• Have a technically competent individual install and configure the software and train others in its use.

Management might balk at spending time and money in performing these tasks, but not doing so will invariably lead to future problems such as the inability to generate important detailed reports. Lack of timely or convoluted financial information will invariably lead to a reduction in organizational efficiency and effectiveness and the nagging regret that more time and energy was not spent in the beginning to avoid the ensuring problems.

Please send posts or tweets to us if you have any comments or questions for Laurence Scot.

Articles of Interest

Four Ways To Get More Value From Digital Marketing
by David C. Edelman
published: March 2010
McKinsey Articles
http://www.mckinseyquarterly.com/Four_ways_to_get_more_value_from_digital_marketing_2556


Since the dawn of the Internet, marketers have regarded it as a vast laboratory, launching experiment after experiment to crack the code that generates sales and customer loyalty. Not surprising, most have failed. Consumers adopted digital technology as they themselves saw fit, in the process fundamentally altering the way they make purchasing decisions. Companies that understand this evolution are now carefully moving digital interactivity toward the center of their marketing strategies, rethinking their priorities and budgets, and substantially reshaping their processes and skills.

Through our work with dozens of companies navigating this shifting landscape, we have found that the most successful digital marketers focus on managing four core sources of value as they increase the percentage of marketing and channel spending that is directed to digital activities. First, they coordinate their activities to engage the consumer throughout an increasingly digital purchase journey. Second, they harness interest in their brands by syndicating content that empowers the consumer to build his or her own marketing identity and, in the process, to serve as a brand ambassador. Third, they recognize the need to think like a large-scale multimedia publisher as they manage a staggering increase in the content they create to support products, segments, channels, and promotions. Finally, these marketers strategically plot how to gather and use the plethora of digital data now available.