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Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

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by Andrew Tellijohn
May 2004

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Fine print

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Law

business builder law  

Practical steps to
reduce legal risks
from office records

by Steven Marino  

Businesses today generate ever-growing volumes of records. Corporate employees in the United States sent nearly 3 billion e-mails per day in 2000.

Although many business records have almost eternal life, people often don’t realize that their own records can come back to bite many years later. In fact, most internal documents are discoverable in litigation — meaning that in a lawsuit, a disgruntled employee, shareholder, competitor or other opponent can get relevant documents simply by asking.

Business owners can greatly reduce their exposure by implementing smart strategies in creating, distributing and maintaining files and documents.  Here are some preventive suggestions.

Creating documents
The first document issue business owners face is when to create one. Obviously, certain documents like financial records are necessary to run a business, and major transactions must be documented for institutional memory and legal reasons. For less clear-cut matters, businesses should affirmatively answer these questions before creating documents:

• Must this information be stated in writing?

• Can we live with such a document being quoted in public?

•  If a disgruntled opponent tries to take statements out of context, do we have a convincing response?

In sensitive situations, managers should first discuss all issues orally and then make a decision and memorialize the decision and reasons in writing. This helps avoid creating documents with harmful admissions and protects potential attorney-client privilege. 

Once a legal dispute arises, it is safest to consult with company legal counsel before writing anything for internal use about the dispute. Remember that communications between client and attorney made for the purpose of seeking or giving legal advice are privileged and generally not discoverable. By contrast, notes to yourself or colleagues would have no protection.

Once you have decided to create a document, remember that well-written documents put the business in the best possible position for potential future disputes.  Here are some key writing tips:

• Choose and revise your words carefully to accurately express your thoughts

• Stick with facts

• Be concise

• Re-read and proofread before completing and sending documents

• Don’t speculate about what you don’t know

• Don’t editorialize unless asked

• Don’t gossip

• Don’t second-guess past actions by you or the company

• Don’t use inflammatory words

• Don’t use crude language, even in jest

Periodically remind all employees of these points.

Using documents
Handling documents properly after creation is another important part of good risk management.  This process has several steps.

First, have a clear, detailed, written confidentiality policy for your files and records of all kinds and inform all employees of their obligation to comply with it. Also, be prepared to enforce that policy quickly when employees leave the company (for example, via exit interview, warning letter, or if necessary a preemptive lawsuit).

Second, back up, at least incrementally, all important electronic files often (daily or weekly), store backups offsite, and test some periodically to ensure data can be restored quickly.

Third, be aware of security concerns with instant messaging and wireless networks and make an informed decision on whether to allow employees to use those functions.  While some companies have allowed employees to use such functions, other companies have not.

Fourth, manage company documents to cut discovery burdens from potential future lawsuits. Pre-trial discovery (information sharing by adversaries) is often the most time-consuming and expensive part of civil suits.

Don’t send or forward e-mail more widely than necessary and don’t use long “cc” lists. More e-mail volume means that, in the event of a lawsuit, more electronic information must be retrieved, copied, reviewed and likely produced in discovery (at greater cost). Also, internal documents should only go to individuals who must take actions or make decisions based on them.

Another useful step here is to implement a network security system that permits employees’ access only to what they need to know. This reduces risks of security breaches and chances of data going to other non-interested company departments. That in turn reduces the chance that a court will permit broader discovery by an opponent, which will save the company money.

The company’s network administrator should set up an effective network folder structure so the electronic data of each department isn’t unnecessarily accessible to other departments. For example, if an opponent demands the CFO’s electronic files but those files haven’t been accessible to sales managers, then the sales managers’ files should be off-limits to discovery. Further, such limits will help the company protect its trade secrets from misappropriation by helping to show that the company took reasonable steps to safeguard them.

Fifth, set up a documents destruction and retention policy/schedule suited to your business and consistently follow it. Although the costs of keeping electronic and paper files indefinitely may seem minimal, a good documents destruction/retention policy is useful in at least three ways. It limits the volume of old documents that may need to be searched, reviewed and produced to an opponent in future litigation. It provides a legitimate explanation for not having old documents. It makes finding retained documents easier.

To set an appropriate schedule, you must identify all the types of documents your company has and decide how long you realistically must keep and use each type. For example, you may keep contracts for 25 years, correspondence for six years, and other kinds of records for various periods. 

Of course, when you expect a likely or imminent lawsuit, you must suspend that policy and immediately instruct all employees to preserve all relevant data that are likely to be sought in discovery. Indeed, regardless of your motives, destroying data after a dispute arises will look very suspicious.

Steven Marino of Marino Law Firm in St. Paul handles business disputes and commercial litigation: 651.631.8508; steve@marinolawfirm.com; www.marinolawfirm.com