Capitalization Matters

Over the past 30 days, I came across four articles that made me sense a shift in the air regarding online access to legal client data. Collectively, these pieces focused on a trend that’s sweeping the corporate landscape: Realizing the tremendous productivity and client service benefits—and the fact that email, laced with inefficiency and security issues, simply isn’t cutting it anymore—lawyers are finally getting comfortable with the idea of their confidential client data being stored somewhere outside the four walls of the firm.

I recently attended an event at the MIT Media Lab sponsored by TheFunded.com, a social networking website geared toward CEOs and founders of start-up companies who want to share war stories of trying to get VC or angel seed funding. 150 CEOs and start-up founders were invited to attend.

I'm a big fan of Paul Lippe's legal column for The Am Law Daily called “Welcome to the Future” and have been reading it regularly for the past six months or so. I noticed that the final paragraph of his recent interview with David Baca, chairman of the Seattle-based law firm Davis Wright Tremaine, summarized so much of the buzz that has been going around lately on the potential for real change, death of the billable hour, and profits per partner as a metric—which have all been frequent topics of Paul's, as well as so many other "oracles" of the legal market.

A few days before his inauguration, Barack Obama told John King on CNN:

"Here's the good news ... we have a lot of investment in making the health care system more efficient. Just a simple thing like converting from a paper system to electronic medical records for every single person can drastically reduce costs, drastically reduce medical error, make not only health care more affordable, but also improve its quality."

When I heard this, I imagined for just a moment that he had said "electronic legal records" instead.

With the transitional period for Section 409A ending on December 31, 2008, now is the time for organizations to review their equity compensation reporting practices and correct any oversights. Such action will help to avoid the onerous penalties of Sec. 409A and prevent them from thwarting your next critical financial transaction. Miss this last chance and you may find that you’re the one getting whacked.

Companies have started to pay more attention to valuation ever since FAS 123R option expensing became mandatory.