The last thing a child wants to see on Halloween is a sign reading “No candy at this residence”. But in many states, these signs are meant to protect the trick-or-treaters. Why? Because these residences are home to a sex offender.
 
States, including Missouri, Tennessee, Virginia, New York, California, Wisconsin, New Mexico, Texas, South Carolina, Illinois, New Jersey, Maryland, Arkansas, and Florida, have passed laws restricting the movement of sex offenders on Halloween. These laws are not founded on any specific incident, but are a reaction to the idea that Halloween provides a prime opportunity for sex offenders to interact with children and use costumes to conceal their identity.
Many of these laws require a curfew from 5 P.M. to 10:30 PM, during which sex offenders must remain in their residences (which cannot be decorated for Halloween), with the outside lights off, and a sign posted saying “No candy at this residence”. Some states, like Virginia and South Carolina, even require that sex offenders attend a seminar or treatment session during these hours.  These laws are often enforced with random door checks, and some districts, like Franklin County in Missouri, have detailed a team of officers for enforcement.

But are these measures effective in protecting children? A new study, published in the September edition of Sexual Abuse: A Journal of Research and Treatment, says no. This study found that there was no increased rate of incidents on or just before Halloween and that incidents did not demonstrate any unusual case characteristics. Additionally, the rate of incidents has not changed in response the Halloween crackdowns. According to the Bureau of Justice, only 5% of incidents involving children aged 6-11 are perpetrated by a stranger, rather than a family member or acquaintance. These findings have led some states, like Alaska, to reject such measures as a waste of money.
 
These laws are also being challenged based on the question of constitutionality. Suits have been brought in many states in response to these measures. In Missouri, a ruling by a federal judge has already declared several aspects, such as the requirement that sex offenders remain in their residence, of the Missouri law “unenforceable” for a lack of clarity. However, other parts, such as the requirement for porch lights to be turned off and for signs to be posted, were deemed acceptable. There is currently a challenge pending at the Missouri Supreme Court, and the possibility exists that a ruling could be administered before this Halloween declaring this law unenforceable.

Attorney Bart Basi offers the Lawline Tip in The Legal Beat Clip of the Day. Go to Lawline.com now to view the full course.

Lawline's Weekly CLE News Wrap-Up

Hogan and Hartsen is currently in advanced talks for completing a merger with Lovell, the New York Times reported.  This merger would create one of the world’s largest law firms.

Both firms are already internationally stable, as Hogan owns 14 offices outside of the United States and Lovell 26. Combined, the firm would have an estimated 2,500 attorneys with revenues of approximately $2 billion.

Established in 1904, Hogan and Hartson, based in Washington D.C., is the oldest major law firm in the United States, and currently employ approximately 1,100 employees. In 2006, the American Lawyer listed the company as one of the top twenty firms in the United States. 
Lovell currently has a strong hold in nearly every European district. It has also had an extensive history of mergers, most notably with the German firm Boesebeck Droste in 2000, which has increased its client base.

The two firms have reportedly been in negotiation for two years, and have now engaged in higher talks due to growing legal market opportunities abroad in countries such as Russia, Brazil, and India. 

PepsiCo was a no-show at its court date on Wednesday, October 28, and consequently lost a default decision for $1.26 billion. A lack of representation at such a case is highly unusual, especially for a company with as many attorney contacts and representatives as PepsiCo.

The suit involved two men, Charles Joyce and James Voigt, who accused PepsiCo of using their idea to sell purified water. The two claimed they had met with company officials and presented the idea, but received no feedback despite the decision to launch Aquafina, PepsiCo’s branded purified water that has accumulated billions in profit.

PepsiCo argues that the company has been improperly served, and that the decision should be overturned as a result. However, other sources have cited misplaced paperwork as the reason for PepsiCo’s absence.

A hearing will be held on November 6, allowing PepsiCo to argue its side of the issue.

It was 1987 when a crash in the stock market prompted Personal Injury and Medical Malpractice attorney Ed Ruffo to reconsider a career in business. With an upcoming CLE Course, Ruffo recalls his early days as an attorney and what still keeps him passionate about the profession today. He also imparts invaluable advice to young attorneys and legal associates entering the field.

At 2:30 p.m. today, President Obama signed the 2010 National Defense Authorization Act. The bill will bring Federal protection to the homosexual, bisexual, and transgender community. Many see it as a progressive step in civil rights under the Obama administration, while others view the bill as an attempt to silence religion.

Many conservative Christians are wary of the bill’s implications. Although the bill states that criminal measures will apply only to violent cases, Christian leaders believe this may extend to sermons with a perceived link to violent acts. Furthermore, they believe this extension could ultimately silence those who oppose the law.

The bill explicitly states that “Nothing in this Act shall be construed to prohibit any constitutionally protected speech, expressive conduct or activity… including the exercise of religion.” In effect, the bill stays true to the Constitution, and pastors retain the right to speak their religious beliefs. 

Nonetheless, opponents of the bill have their eyes on the future implications of the bill. Some see the bill progressing to the workplace through the proposed Employment Non-Discrimination Act (ENDA), which would prohibit employment discrimination based on sexual orientation and gender identification.

Supporters  of the bill and people of the homosexual, bisexual, and transgender communities focus on the bill’s impact on the status quo. The bill represents advancement in acceptance, understanding, and equality in America amongst a community that past civil rights legislation has overlooked.

 “Thoughtcrime, they called it. Thought was not a thing that could be concealed forever… sooner or later they were bound to get you.” George Orwell, 1984.

Today’s  children are being groomed for the future with stricter regulations on school hours, curriculum, behavior, and even nutrition. Slap the label of “Tomorrow’s leaders” on these kids and its all fair game to have such demands, right? But how much of this comes at the cost of the children’s freedoms? And how will this affect their thoughts as adults?

Freedom of speech in public schools has been an ongoing issue for decades. Recently, Morse v. Frederick, a 2007 Supreme Court ruling, addressed a student’s “Bong Hits for Jesus” banner. The student, Joseph Frederick, held the banner at an after-school event. The banner was confiscated and the student suspended as a result. The court denied Frederick’s claim.  While “Bong Hits for Jesus” may not be the most progressive message on the record, the question remains as to whether the expression was protected under the First Amendment.    

The concern becomes even hazier from there.  For example, The Supreme Court ruled in favor of a Poway, California school in a case involving the school’s dress code. The student wore a shirt with the words “I will not accept what God Has Condemned. Homosexuality is Shameful, Romans 1:27” on the school’s homosexuality tolerance day. He was forced to wear masking tape to block the message, and the Courts ruled this was acceptable.

The messages may seem trivial, but the implications are big. What are we teaching kids about our country and our laws? We are sending the message to students that freedom of speech is conditional. Whether or not one agrees with a given expression, disagrees with it, or regards it as nothing more than juvenility, these cases are forms of protest. By restricting the student’s freedom of speech, we restrict the future of the very values our country stood upon; the ability to speak out, stand up, and preserve rights.

It’s a topic that can easily snowball. Stricter regulations build upon each other, and eventually we create a future in which the adults become silent drones, whose freedom of thought issued by our First Amendment Rights becomes restricted through regulation. George Orwell’s 1984 depiction, undoubtedly, is quite an extreme reference, but nonetheless, it forms the vision of a dangerous path that Federal and State government alike need to consider when handling our “Leaders of tomorrow.”

Some Real World Tips for Supervising Document Review
Federal Rule of Civil Procedure 26(g) states that, “Every disclosure . . . and every discovery request, response, or objection must be signed by at least one attorney of record in the attorney's own name . . . By signing, an attorney or party certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry. . . it is complete and correct as of the time it is made . . .”

In the last few years, the legal community has been bombarded with an explosion of discovery vendors who are rapidly expanding the scope of their services.  Many of these staffing agencies and consulting firms now offer “end-to-end” discovery services that go way beyond the mere furnishing of contract attorneys or document review software—they now including non-discreet services such as the “management” of the entire discovery process. 

What does this mean for the attorneys and clients who purchase these all-inclusive services with respect to the federal and state discovery rules?  Can the attorneys just sit back and wait for the production discs to be delivered to their desks?  The answer is a definitive “no.” 

The American Bar Association and all of the state and local bar associations who have examined the outsourcing issue all arrive at the same conclusion: outsourcing is permissible as long as the attorney of record remains responsible for the work performed and rigorously supervises those performing the work.  Unfortunately for the practitioner, none of these bar opinions attempt to tackle the crux of the issue by articulating a clear definition of what constitutes adequate “supervision.”   

Stepping in where the bar associations have fallen short, we have developed a list of rules to follow for attorneys who wish to outsource part of the discovery process while still meeting the high level of professional responsibility imposed by the ethics rules.  We hope that this information provides some concrete guidance to practitioners on the specific topics in which the bar association decisions have remained vague.   

1.    Do Not Hire A Substitute Supervisor – All of these newly emerging document review vendors offer “project managers” or “team leaders.”  But hiring non-attorneys to oversee the daily operations of a legal document review is highly suspect. If you hire someone to supervise or manage your project, you are either not taking full responsibility yourself, or the client is paying twice for the same services. 

2.    Know Your Case and Know the Law – It may seem obvious, but if a document review team is relying on you to teach them about the case, you have to know the facts and the applicable case law well enough to accurately convey it to your team.  In addition, you must know the ethical rules and regulations regarding outsourcing in your jurisdiction.  The oft-cited ABA Formal Opinion 08-451 regarding outsourcing is a useful guide, but may not be controlling in your jurisdiction.

3.    Know the Technology – As attorneys, this step can be one of the most daunting.  The simple truth is that the technology used by our clients, courts and opposing counsel in the discovery process is an inescapable aspect of practicing law today.  Any experienced discovery attorney can tell you that minor technological gaffs can dramatically impact the substance and quality of your document production. 

4.    Personally Select Your Team – Staffing agencies do an excellent job of providing a convenient pool of potential contract attorney and paralegal candidates.  However, as the person ultimately responsible for the work completed by the team, you should review the resumes, interview and select the team personally. 

5.    Personally Train Your Team - You should take responsibility for training the team in person, even if the review team is located across town or across the globe. Resist the urge to do a “quick start” training with a slim list of bullet points, key words or ideas.

6.    Give the First Assignment to Yourself – Someone who has never played a musical instrument would not make a good conductor.  Similarly, in order to be a credibly supervisor on a document review, you have to get some hands-on experience.  Depending on the size and scope of the review, sit down and code documents yourself for an hour, a day, a week or even a month.

7.    Design Tracking and Status Metrics

Using your experience in reviewing and coding documents, what are the expectations that you have for your review team?  What is the slowest acceptable rate of review?  Is there a pace that would be too fast?  How will you calculate accuracy?  Almost all review software will automatically generate reports regarding number of documents coded in any given time period and allow for a comparison among team members, but the important part is how those reports are interpreted. 

8.    Maintain Constant Contact with Your Team

There are many good excuses that attorneys give for not working directly with their review team: too busy with other responsibilities, not enough physical space close to the office, or fear of leaving their office for an extended period of time.  However, there is absolutely no way to credibly and effectively supervise a document review team (especially a large team of anywhere from 10-100 attorneys) without physically seeing them every day.

9.    Conduct Extensive Quality Checks and Make Adjustments Accordingly

On one hand, the quality checking phase is incredibly simple, right?  If you’ve selected a top-notch team and trained them well, they will not make many mistakes and the supervisor can review a handful of random documents and pat himself on the back for training the team so well.  Unfortunately, that is not how document reviews work.  No document review has ever been accurate and consistent from the get-go.  As the case develops, issues and strategies change, priorities are revisited, new players emerge, etc.  Readjusting is inevitable. 

The hard part is not just checking to see if there is a problem, but getting that problem fixed and making the necessary adjustments to steer the team in the right direction. This critical step absolutely cannot be outsourced.   

10.    Personally Review and Approve all Discovery Related Invoices – You may have multiple vendors assisting with discovery tasks such as document collection, processing, hosting, software, staffing agencies, etc. The supervisor should not blindly approve bills and pass them through to the client.  Rather, the supervisor should have personal knowledge of the charges.


In summary, as the attorney of record, you have been retained to certify that you personally have performed a reasonable inquiry and, to the best of your knowledge, are making complete and correct discovery disclosures.  The vendor assisting you will never be willing nor able to sign their name to anything.  Therefore, the supervision of a discovery project can not be ignored or outsourced to non-attorneys.  The attorney who neglects her job as a discovery supervisor is not only shirking her ethical duties, but is exposing herself and her clients to enormous risk.  In today’s world, conducting discovery may include taking advantage of a wealth of resources offered by staffing and technology vendors.  But, the attorney of record is always ultimately accountable. 

To read full unedited version please click here.

This blog was written by Julia Hardinger, co-founder of Hardinger & Tanenholz LLP, a unique Discovery Counsel law firm that specializes in all aspects of discovery, including the end-to-end management of large-scale document reviews. This blog is the personal opinion of the author and not intended as legal advice.

The on-going negotiation between the NBA and their locked-out referees provides a very useful negotiation lesson to anyone who has a boss, board or a constituency.

First, to summarize the negotiation’s current status, a deal had been tentatively struck last month between the parties but was then rejected by the refs’ executive board at the last minute. It was then subject to a vote by the referees, who voted it down. 

This two-step approval requirement on the side of the referees illustrates an important negotiation tactic – and one that gave them a structural advantage in the negotiations.

What is it? The Higher or Limited Authority move.

It occurs when one side constantly defers to a “higher authority” to make any substantive move and says they just “don’t have the authority.”  How should you respond?  Explore the extent of your counterpart’s authority early in the negotiation.  Then, to the extent you can, match it.  Generally, it’s disadvantageous to have more authority than your counterpart because you can concede – and often do - while your counterpart can’t.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

The Intersection of Judiciary Law and Collateral Estoppel
Izko Sportswear Co., Inc. v Flaum ; 2009 NY Slip Op 04387 [63 AD3d 687] ; June 2, 2009 ; Appellate Division, Second Department  is a somewhat famous case in Legal Malpractice.  In earlier decisions, the Appellate Division determined that plaintiff stated a cause of action in Judiciary Law 487.  Now, the case has ended with a dismissal;   The Court of Appeals then denied leave to appeal.  Two lessons are to be learned here:
 
1.  Violation of Judiciary Law 487 may be demonstrated either by deceit or by chronic extreme pattern of delinquency; and

2.  Judicial determinations of attorney fees act as collateral estoppel to a later legal malpractice or Judiciary Law 487 determination.

Reviewing the findings of the Appellate Division, we see:
"A violation of Judiciary Law § 487 may be established "either by the defendant's alleged deceit or by an alleged chronic, extreme pattern of legal delinquency by the defendant" (emphasis supplied) (Knecht v Tusa, 15 AD3d 626, 627 [2005]; see O'Connell v Kerson, 291 AD2d 386, 387 [2002]; see also Bridges v 725 Riverside Dr., 119 AD2d 789 [1986]; Trepel v Dippold,2005 WL 1107010, 2005 US Dist LEXIS 8541 [May 9, 2005]). "

A Short Personal Note
The folks over at Attorney.org recently contacted me about an interview for their website. If you don't know who they are, check them out.  . In addition to legal news, they also highlight noteworthy attorneys from around the country. One of their upcoming features is a highlight of local Attorney Generals and District Attorneys. They interviewed me for an article about how to decide if you need a Legal Malpractice Attorney and whether or not you have a case. You can view the article here: Attorney.org
 
Exclusions and Recission in Legal Malpractice Insurance
A prime worry for the legal malpractice practitioner, on either side of the aisle, is whether there is legal malpractice insurance.  For the defendant, it is paramount; for the plaintiff it is significant.  Much thought has gone into how to determine whether the target defendant has adequate [or indeed, any] insurance, and planning has to go into the target's application for insurance."
One prime weapon that the insurer has is the "prior acts" doctrine.  It says in essence that you must report all past prior acts that one might reasonably believe could lead to a law suit for legal malpractice, whether it has been started or not.  We remember one managing attorney who shouted at least once a week: "Put the Carrier on Notice!"  Sometimes he was right.
Here, in Executive Risk Indemnity v, Pepper Hamilton, LLP, we see Justice Jone's decision on this issue:

The Outer Reaches of Breach of Fiduciary Duty and Legal Malpractice
In    PETER GIANOUKAS, DORIS GIANOUKAS and NICHOLAS TARSIA, Plaintiffs, - against - PETER CAMPITIELLO, ESQ., LEVY & BOONSHOFT P.C., DAVID M. LEVY, ESQ., STEPHEN BOONSHOFT, ESQ. and EAST WEST ACQUISITIONS, LLC, Defendants.;09 Civ. 1266 (PAC);UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;2009 U.S. Dist. LEXIS 95354;October 13, 2009   we see the outer reaches of a breach of fiduciary duty and of legal malpractice in a well written and reasoned decision by Judge Paul Crotty of Southern District of New York. The facts and allegations are simple:
"The Amended Complaint alleges five separate fraudulent transactions: (1) Codine(x), (id. PP 41-68); (2) Pay Pad, (id. PP 69-87); (3) LIMPE, (id. PP 88-106); (4) Acellus, (id. PP 107-16); [*3] and (5) UTTI, (id. PP 117-34). Throughout the Amended Complaint, Campitiello is portrayed as the architect of the fraudulent transactions which bilked Plaintiffs out of in excess of $ 400,000. He did this as an employee of L&B, and used L&B's escrow account to receive funds from the Plaintiffs and thereafter funds were disbursed from the account to consummate the fraud. The Amended Complaint does not allege that Levy and Boonshoft were involved in, or knew of, the fraud"

“Extra! Extra! Read All About It!”

Remember when the penmanship of professional journalist, fresh off the daily press, dominated as our morning media source? Kids would stand on the street corners, selling the daily paper for a nickel in return from the passing professional catching up on the previous day's events. Those were the days. Okay, so I don’t remember that either, but I saw something like it in The Newsies. Nowadays, things are a little different.

The internet has created a platform in which millions of readers can decipher between a seeming endless array of sources for their news and media outlets.  What’s more is that just about anyone can be a journalist: professionals, amateurs, teenagers with permanently indented grooves in their computer chairs, and yes, even lawyers. It’s not all fun and games though, and there’s more legal repercussions than many realize when they type away at the keyboard, especially in the very privacy-sensitive Legal profession. Put it another way: “Lawyers who blog, it almost sounds like a horror movie.”

These are the words of Michael Grygiel, a chairman of Media and First Amendment Law Practice and speaker at the October 14 “Social Media For Lawyers” Gothamedia Ventures seminar at the New York Law School. The seminar dug deep into the growing blogging trend and the impact it has had on the Law profession. Perhaps it’s the ease or the seeming anonymity, but what may appear as harmless communication can lead to great consequences. The seminar discussed many of the pitfalls and legal repercussions that can result from “innocent” blogging. Every blogger is subject to risks, such as libel, trademark, copyright infringement, and invasion of privacy.

Then again, blogging is still a fairly new phenomenon, so there’s a lot of interpretation and ambiguity involved in its related law. Are bloggers treated the same as journalists? Do they get the same Reporters Privilege protection under the law as professional journalists? And finally, can Joe Schmo really get sued for the things he posts on his website after downing beer number twelve on a lonely Saturday night? How do we even know who Joe is?

The seminar covered all this in a one hour discussion that proved to be far greater in professionalism and class than my words can portray. However, Michelle Zierler, organizer of the event and Director of Programs in Law and Journalism at the New York Law School, provides greater grace: “We wanted to offer hands on tips for maximizing the effectiveness of social media and flag the dangers that lawyers, in particular, need to stay clear of.” And the program did just that. The speakers gave anecdotal references of attorney’s who have faced legal repercussions relating to issues of client confidentiality, multi-jurisdictional practice, advertising, and criticisms of fellow associates, despite the thought that these were “anonymously” written (as the discussion showed, no web blogger is actually anonymous).

From the basis of the first amendment on the Freedom of Speech to current issues involving Facebook, BALCO, and “The Skanks of New York,” this seminar provided a thorough breakdown of what attorneys need to be conscious of in regards to blogging and social networking. It is essential to any legal practitioner – and any blogger for that matter – who wishes to learn about a still maturing set of legal issues and boundaries. At the very least, the seminar revitalizes an appreciation to the art, professionalism, and delicacy that goes into traditional journalism. And, even though the internet has shared the power of the press with each and every one of us, perhaps there are some things better left for the boy on the street corner. If there’s still any around, that is.

Ringtones, popular among music lovers of all sorts, are everywhere.  Just walking down the street, I hear snatches of songs emanating from cell phones everywhere. As the American Society of Composers, Authors, and Publishers (ASCAP) would have it, I am being treated to a concert every time I hear a ringtone.

On Wednesday, October 14^th, a federal judge ruled on a case brought against Verizon and AT&T by ASCAP, seeking to collect performance rights for the playing of a ringtone. ASCAP’s argument was founded on the basis that copyright infringement begins when others can hear a song played in public; therefore the download fees already paid by cell phone providers is not sufficient.

This argument was rejected by US District Judge Denise Cote, who ruled that: “ASCAP has failed to raise a question of fact that the downloading of a ringtone from Verizon to a customer’s cellular telephone is a public performance of a musical work”. The case, while legally a long shot, establishes an important precedent: that playing music in public, without any commercial purpose, does not infringe copyright, a standard that will protect consumers in the future.

Poor planning is the first mistake identified in an article about negotiation pitfalls on the Stanford Graduate School of Business website.  I have long emphasized that our biggest challenge as negotiators – and managers of negotiators – is to change our planning and negotiation behavior from off-the-cuff, instinctive negotiating to strategic negotiating based on the experts’ proven research.

The negotiation research is clear – there is a right way and a wrong way to plan for negotiations and to negotiate in most circumstances. And by strategically preparing on the substantive issues involved AND the process of negotiation – based on what you know works and what doesn't - and then letting this guide your moves, you will substantially increase your likelihood of success.  This, in essence, is strategically negotiating.

On the other hand, if you only plan and negotiate instinctively or intuitively and, in effect, wing it, you are leaving your likelihood of success much more to chance.  It's not that you cannot achieve the best possible result. It's possible, just much less likely.

My ExpertNegotiator Planning and Management Software is a unique web-based tool designed specifically to help individuals negotiate more strategically and to help managers create and implement negotiation best practices.  It is an easy-to-use system that will help you become a more strategic – and thus more effective – negotiator and/or manager.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Yesterday, Oct 14th, two court cases pertaining to same-sex marriage were brought to the New York State Court of Appeals: Godfrey v. Spano, 147, and Lewis v. New York State Department of Civil Service, 148. The ensuing discussion tackled the implications of recognizing out-of-state, same-sex marriages.

In Lewis, the Civil Service Commission is being confronted on its decision to grant benefits to the spouse and dependants of residents who married outside New York’s jurisdiction.

Similarly, Godfrey challenges Executive Order No. 3, issued by Westchester County Executive Andrew Spano, which stated that Westchester County would officially recognize same-sex marriages issued outside of New York.

A major issue of concern involves the rights of those New York residents who have filed for domestic partnerships or civil unions inside of New York. Some judges believe that these residents would feel slighted by giving out-of-state marriage benefits. In fact, Judge Pigott claimed, "we're going to say to Canadians and to Vermont residents and to people of other states that, 'You're more valuable to us than our own residents.' "

But proponents of granting out-of-state marriage benefits claim that such decisions would bring stability to families. By offering such benefits, those interested in moving to New York would be able to maintain their lifestyles. Susan L. Sommer noted, "It allows [a] family to plan. It allows there to be reliance by third parties."

However, the extension of benefits to same-sex marriages has further implications. As Judge Graffeo commented, not only would government agencies be subject to providing certain benefits to the families of same-sex-marriages, but private companies would as well. Further debate led to suggestions that the Civil Service extend benefits only to those spouses of state employees. The effect these decisions would have has great implications for public policy and judges are looking to the legislature for support.

The Court is most likely to have reached a decision on Lewis and Godfrey by the end of November.

CIT Group, a US commercial lender, is negotiating with its bondholders to exchange a portion of its debt for equity.  To increase its leverage, it is simultaneously preparing to apply for Chapter 11 bankruptcy ¬protection – and default on $800 million in debt due next month.

As I describe in my most recent monthly column, leverage is a combination of two factors:

First, how much you and your counterpart need a deal.  The more desperate you are, the weaker your leverage; the more desperate your counterpart, the stronger your leverage. 

Second, the relative value of your and your counterpart's Plan Bs (your alternatives if you don't do the deal).  The better your Plan B, the stronger your leverage and the better your counterpart's Plan B, the weaker your leverage.

By preparing for bankruptcy, CIT Group is taking a concrete step to limit the attractiveness of their counterpart’s Plan B.  Bondholders reportedly would get about 90 cents on the dollar if they agree to the deal but likely only 70 cents on the dollar in bankruptcy.  CIT Group is also taking steps to discourage individual bondholders from holding out in the hopes of getting a better deal than those who sign on to the plan early.  The holdouts believe the passage of time improves their leverage because the approaching deadline increases CIT Group’s need level.

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.

Many variables impact the offer-concession stage of a negotiation.  What issues to address first and when and how much to move should be considered during your strategic planning process.  Here are my Top Ten rules of thumb for orchestrating the best game plan once the negotiation begins:

1.  Expect, plan and insist on reciprocity of movement.  Be prepared to give to get but don’t give     more unless you’re getting more.

2.  Say “I’m sorry.  You will have to do better than that” in response to the other side’s initial offer (as many times as they will let you).

3.  Start with the most critical issues on which both sides will likely agree.

4.  Consider the value of momentum – the longer the negotiation lasts, the more committed both sides will feel.

5.  Initial moves of less than 5 percent rarely generate meaningful moves from the other side.

6.  Rarely make a larger concession than your counterpart.

7.  Buyers should insist on reciprocal percentage moves; sellers should insist on reciprocal dollar moves.

8.  The earlier and more often you raise an issue, the more important it will be perceived.

9.  Consider limiting your authority on the most critical issues.

10.  Remain flexible so you can take advantage of new strategically important information and unanticipated opportunities.

For a more comprehensive discussion of each, sign up for a free trial of my ExpertNegotiator Planning & Management Software to access the online version of my book, Gain the Edge! Negotiating to Get What You Want (St. Martin's Press 2004).

Marty Latz is the founder of Latz Negotiation Institute, a national negotiation training and consulting company, and ExpertNegotiator, a Web-based software company that helps managers and negotiators more effectively negotiate and implement best practices based on the experts' proven research.  He is also the author of Gain the Edge! Negotiating to Get What You Want (St. Martin’s Press 2004). He can be reached at 480-951-3222 or Latz@ExpertNegotiator.com.