NJ Upholds Non-Competition Agreement
June 01, 2004
As previously reported in <i>LFPBR</i>, several states have upheld the forfeiture of non-qualified retirement benefits otherwise payable to a partner choosing to compete with the firm. In <i>Borteck v. Riker, Danzig, Scherer, Hyland, and Perretti, LLP</i> (A-31-03) (April 5, 2004), the New Jersey Supreme Court unanimously concluded that the retirement provisions of a law firm's partnership agreement did not violate N.J. Rules of Professional Conduct (RPC) 5.6, and held the competing partner to lose his retirement benefits. The case provides further guidance for firms in designing, drafting and defending enforceable forfeiture-for-competition agreements.
Health Benefit Increases Spare No One
June 01, 2004
After years of foot-dragging, large U.S. law firms have embraced the mainstream business practice of countering rising health care costs by steering employees and partners into managed care plans. A recent comprehensive survey of large law firms' employee benefit practices conducted by The Segal Company shows, among other findings, that less than one in five firms offers a traditional indemnity health plan today. The survey also found that health plans at law firms continue to reflect the special needs of these professional service organizations as a whole ' as well as those of the individual firms that participated.
It's Back To Playing By The Rules: Sec. 412(i) Retirement Plans
June 01, 2004
A common expression in the tax arena is the "red flag" ' the concern that a tax deduction is so large, or the tax benefits of a transaction are so favorable to the taxpayer, that it is comparable to waving a red flag at the IRS, inviting scrutiny and possible adverse consequences. Over the past few years, certain retirement plans created under the provisions of Section 412(i) of the Internal Revenue Code have been designed using methods that are questionable, at best, in terms of compliance with the tax code and regulations. This problem became so pervasive that it was widely anticipated the IRS would respond to the red flags, and put an end to the abuses. Last month, it happened. IRS guidance and proposed regulations were enacted to try to get everyone to play by the rules. Not that the rules are bad; a 412(i) plan could still be right for you.
Heard it in the Halls: Highlights of IFA's Legal Symposium
June 01, 2004
Last month's International Franchise Association (IFA) Legal Symposium brought together many of the world's leading franchise attorneys and in-house counsel for large franchisors. The items below are brief accounts of some of the presentations and discussions.
FTC Addresses Earnings Claims in Internet Advertising
June 01, 2004
As franchisors find new ways to reach out to prospective franchisees, there are inevitably questions about how franchise laws ' written long before electronic media such as the Internet and e-mail were contemplated ' might apply. Recently, the Federal Trade Commission's (FTC) staff provided some guidance to help franchisors understand how the FTC Franchise Rule applies with respect to earnings claims made in the context of Internet advertising.
Peddlers or Partners?
June 01, 2004
Much as in the courtroom, service providers and clients often find themselves struggling with an adversarial dynamic, which, of course, is counter-productive to both partners and their mutual interests, and entirely avoidable.
Real Estate Investment Trusts: A Growing Trend
May 11, 2004
REITs were invented in the US by legislation enacted in 1960 to enable small investors to make equity investments in large-scale commercial real estate in the same way they invested in large corporations in other industries. This chapter examines the requirements than an entity must satisfy to qualify as a REIT, the development of REITS, and the advantages of REITs.
Strategic Planning: Look Before You Leap
May 01, 2004
The market is asking a great deal of law firms these days. The economy is still unpredictable, clients are demanding additional value at the same costs, and client loyalty is not what it used to be. As a result, many firms are struggling with instituting internal management controls that emphasize profitability and synergy in addition to practice excellence. <br>Frankly, the move by law firms to become more strategically oriented is reactionary. If you ask most lawyers, they did not expect management and planning to be a part of their daily duties when they entered law school. While some have embraced their new role, very few have done it before. An even smaller fraction is formally educated in the discipline of building strong businesses.
