Harrison Law Group - March 2020

www.HarrisonLawGroup.com (410) 832-0000 March 2020 Te Contractor’s Advantage jwyatt@harrisonlawgroup.com

Creative Thinking Gets Results

There are many interesting days in March. People often associate the month with the observance of St. Patrick’s Day, which falls on March 17. It’s a day of cultural celebration for those of Irish heritage and recognition of Saint Patrick, the patron saint of Ireland. Of course, the revelry of St. Patrick’s Day has gone far beyond what the earliest observers intended. Another day in March is the Ides of March, which falls on the 15th. Prior to 44 B.C., it was a day of various religious observances and a common deadline to settle debts, at least among Romans. In 44 B.C., however, Julius Caesar was assassinated, which was the result of a conspiracy established by a number of Roman senators, namely Gaius Cassius Longinus and Marcus Junius Brutus. Marcus Junius Brutus is arguably the most famous of the three senators. In William Shakespeare’s play “Julius Caesar,” as Caesar dies, he utters the words, “Et tu, Brute?” or “You too, Brutus?” — a phrase many people today associate with the assassination of Caesar. People often claim those were his last words, but his true last words are not known. I recently read a biography on Julius Caesar. He was a man who often found himself in extraordinary situations with the odds stacked against him. And yet, time and time again, he worked through those bad situations to find success, whether in war, politics, or personal matters. One of his best traits was how he reacted to whatever situation he was in. He was a quick thinker and strategist. A lot of conventional thinking, even today, is predicated on a simple formula: If I

When I’m working on a case, one of the best things that can happen for me as a litigator is to receive a phone call from the opposing counsel or party. It’s a call they make to tell me just how much the odds are stacked against me and my client. I’ve heard things like, “I’ve been doing this for 40 years, and you’ll never be able to do this.” Depending on the case, it can take a few months or a couple of years, but either way, I get to call them back when I accomplish what they said I wouldn’t be able to. And now they get to settle, and my client gets paid. It’s a good feeling to be up against the “impossible” and to bring it through to the end for the client. Even better,

find myself in X situation, it will certainly have Y outcome. In other words, if something isn’t going well for me, it’s easy to conclude that whatever we’re trying to accomplish will end in failure. But this is rarely true. When you face a challenging situation, there are any number of variables at play. The outlook may not look promising and you may face setbacks, but that never means you can’t work around those difficulties to push toward the feat you are trying to accomplish. A good example is setting goals for yourself. When you’re working toward any goal, chances are you’re going to face internal or external resistance, and it takes creative thinking to overcome that. A lot of what we provide for clients comes down to creative thinking. It’s not uncommon for clients to come to us when they are facing a seemingly hopeless situation. What we do isn’t rocket science; it’s careful attention to detail. We research, evaluate, and analyze to determine what we can do to bring the client to their ideal position.

you won’t find any senatorial conspiracies here.

-Jeremy Wyatt

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What Is ‘Decentralization’ and How Will It Change Social Media? BREAKING DOWN FACEBOOK

IS EMAIL CLUTTER DRAGGING YOU DOWN? Improve Productivity by Cleaning Up Your Inbox

Nowadays, getting locked out of your Facebook account often means losing access to your Spotify, Tinder, or any of the other sites you can sign into through Facebook. The amount of personal data social media has access to grows all the time, and it can affect your private and professional network. Thankfully, a few tech CEOs, such as Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey, believe social media decentralization could give users greater control over their personal information. Social media decentralization was once a pipe dream for activists, but Dorsey has recently revealed his hopes for redesigning his social media software to put the power back in the users’ hands. Zuckerberg also admitted in a Harvard interview that decentralized software is “quite attractive.” Currently, Facebook and Twitter live in relative anarchy. Their sheer size makes them nearly impossible to audit or manage, which makes falsified information and propaganda infamously easy to pass around. This anarchy also makes it much easier to conceal illegal activity. In an age where identity theft, financial fraud, and selling user information are more digital than ever, it’s important that users and businesses alike have full confidence in the security of their online pages where clients interact with them — especially if information, goods, or services are exchanged. A decentralized system could split the massive, unregulated wilderness of Facebook and Twitter into user-managed “neighborhoods.” Rather than relying on one centralized server that holds over 2.45 billion users, businesses and individuals could host their information on their own computer. This would give businesses and individuals much greater control over their information and how they share it. That’s not to say there aren’t risks associated with decentralization. If unprepared, private hosts could be left defenseless against hackers. Some critics even suggest that a push to decentralize could just be an attempt by Twitter and Facebook to dodge responsibility by moving data off of their own servers.

Do you cringe every time you open your email, preparing yourself for a barrage of unanswered messages? If so, then it’s time to take tidying up your inbox more seriously because poor organization results in far worse problems than simply missing out on happy hours with coworkers. According to psychology professor Susan Krauss Whitbourne, mental and physical clutter can impede productivity. It may also have long-term effects on our ability to process information. One University of Toronto researcher has even found evidence that mental clutter may worsen age-related memory loss. Since most people can cite their digital inbox as a source of stress, starting there is a big step toward organizing your mind and your life. Plus, you can declutter it in just one hour by following these steps. 1. Sweep away the junk. Begin by going through your emails from oldest to newest and deleting anything you know you won’t need. When you see an email you want to delete, search to find others from that sender — it’s likely there are multiple you can trash right away. 2. Categorize necessary messages. Create folders to organize the remaining emails. You might use a time-based system, like “First Quarter of 2020,” or descriptive names, like “Receipts” and “Current Projects.” Choose a system that works for your personal preferences. 3. Respond to urgent emails. Have unanswered emails that can’t be filed away? Use the two-minute rule: Immediately respond to anything that will take less than two minutes to answer. For the ones that need more effort, put them on your to-do list and schedule a time on your calendar to respond. 4. Maintain a healthy email habit. Now that your inbox is in a manageable state, develop habits to keep it that way. Check your inbox when you get to work and follow the steps above. Once a week, set aside a few minutes to sort through and organize anything you missed. The more time you devote to decluttering your email first thing, the more time you’ll have to accomplish bigger and more important goals.

While decentralization offers solutions to some the problems of social media, it’s

an approach that requires cautious implementation. Only time will tell if decentralization’s benefits outweigh its risks.

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Is That Picture Worth $1,000? How to Avoid Copyright Infringement for Your Business

require you to pay a fee, give credit to the original creator, or guarantee the image’s use as-is without further alteration. In other instances, ask the photographer, designer, or artist for permission to use the image and agree to include a watermark or a link to their website. Find and use free images instead. Several websites, such as Pexels, Pixabay, and Morguefile, provide hundreds of photos for businesses to use for free and without worry of copyright infringement. Creative Commons is also a great resource to consult. This nonprofit provides free licenses and tools that make copyright material easy to understand. You may need to meet some agreements under a Creative Commons license, but afterwards, you can access and use numerous photos.

We’ve all heard the saying, “A picture is worth a thousand words,” and for businesses, this is especially true. Images used on a website and in marketing materials contribute to a specific vision and encourage customers to buy into a service or product. However, obtaining and using those images requires much more than a quick search on Google. To make the biggest splash while avoiding heavy penalties that can tank your business, follow these tips when searching for images. Presume all images are protected by copyright. Never assume that an image you find while browsing the internet is free to use. It may be easy to download one you like and use it on your website, social media account, or blog, but it can have devastating consequences. Someone who wrongfully uses copyright material worth at least $2,500 may face up to five years in prison and up to $250,000 in fines according to federal statute. Play it safe by assuming every image or photograph you find online is protected by copyright law. Always ask permission for use. Even if an image isn’t under copyright, you still might not have permission to use it. Find the source of the image, and inquire about using it for your own business. The image itself may have certain conditions you need to meet before you can use it. For instance, a licensing agreement may HAVE A Laugh

PUZZLE

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Jeremy Wyatt jwyatt@harrisonlawgroup.com www.HarrisonLawGroup.com (410) 832-0000

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Inside This Edition

1.

Conventional Versus Creative Thinking

2.

‘Decentralization’ in Social Media

Productivity Lagging? Check Your Inbox! Avoiding Copyright Infringement for Your Business

3.

Have a Laugh

* 4.

The Science Behind Gut Feelings

Level With Me: Liquidated Damages

Heads or Tails? The Scientifically Smarter Way to Make Business Decisions

about it. If you make a conscious decision that agrees with the subconscious solution of your basal ganglia, your brain gives off a subtle reward. The decision doesn’t have to be logical to feel right — that’s your gut feeling. However, if the conscious and subconscious parts of your brain don’t agree, your insula detects the discrepancy and registers a threat. It’s the “I have a bad feeling about this” response. Fabritius and Hagemann note that gut feelings “represent the most efficient use of your accumulated experience.” According to the authors, flipping a coin is the best way to really listen to your basal ganglia and insula. Your subconscious brain has already made a decision; flipping a coin helps you test your intuition about each option. If the coin lands on heads and you feel relieved, then heads is the right choice. However, if the coin lands on tails and you’re uncertain or want to flip again, then that’s your intuition saying the

You have two options in front of you. They both sound great, are backed by research, and could transform your business for the better, but you can only choose one. Which do you commit to? When you’re faced with two equally worthwhile options, science says the best way to make a decision is to flip a coin. When you flip a coin, you’re not really leaving the decision up to chance; you’re actually calling on your intuition to guide you. The practice is often regarded as unscientific, but there’s a lot of research to support making intuitive decisions. Friederike Fabritius and Hans W. Hagemann, authors of “The Leading Brain: Neuroscience Hacks to Work Smarter, Better, Happier,” explain how we develop that “gut feeling.” Intuitive decisions are driven by two structures in your brain: the basal ganglia and the insula. The basal ganglia are connected to movement and building habits. The insula, part of the cerebral cortex, becomes engaged when you experience pain, feel love, listen to music, or even enjoy a piece of chocolate. Neuroscientists believe the insula is responsible for self-awareness, particularly for recognizing changes in your body.

other option is the better choice. So, the next time you’re caught in a pickle, grab the nearest quarter and put your intuition to the test.

When you have to solve a problem, your basal ganglia start working on a solution, even if you aren’t consciously thinking

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Level With Me By JeremyWyatt

Liquidated Damages: One Contract Clause That Can Ruin Your Company

Unfortunately, liquidated damages clauses have become all too common, even in situations where they simply have no business being used. Even worse , many modern subcontracts include liquidated damages clauses that can “share” the liquidated damages amongst all subcontractors, regardless of whether a particular subcontractor caused any delay on the project. Beware any subcontract clause that reads like this one: “If the Prime Contract provides for liquidated damages, and the Owner assesses liquidated damages against the General Contractor, then the Subcontractor shall be responsible for its proportionate share of those liquidated damages.” I call this a “Broad Form Liquidated Damages Clause.” I can tell you the way such a clause is regularly used: If there are four subcontractors, each of those four subcontractors is assessed an equal portion of any liquidated damages, regardless of whether all four (or none of the four) actually caused project delay! The general contractor may also

Here’s a sad but true story: A subcontractor goes out of business because of a single subcontract clause. In this story, the subcontractor signed a contract for a large commercial project, one that was maybe a little too big for the company. But this subcontractor was at the top of its game, and it completed its project work within the allotted time, within budget (except for some agreed change orders), and without any significant rework. Nevertheless, at the end of the project, this subcontractor got a back charge equal to roughly 40% of the subcontract value. The resulting dispute and cash-flow problems sent the subcontractor into bankruptcy. How did this happen? The answer is a single contract clause providing for “liquidated damages.” So what are liquidated damages? In the construction industry, liquidated damages typically are an agreed amount of damages paid on a per-day (or week or month) basis if a project (or a portion thereof) finishes late. In some situations, liquidated damages can be a fair result. For example, if a contractor promises to build a hotel in Ocean City in time for the summer beach season, it makes sense that the general contractor could be liable to pay liquidated damages if the hotel is finished late, because the owner does not have the benefit of using it during the summer season when it makes its profit.

“eat” a portion of the liquidated damages.

That’s fundamentally unfair, right? So, what can you do to avoid that unfairness?

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... continued from Front

any of these things (and many more) could result in your paying for liquidated damages under a Broad Form Liquidated Damages Clause, even if you are innocent of delay. So, before you sign a Broad Form Liquidated Damages Clause, do a gut check and make sure you are willing to pay liquidated damages for every delay on a project, regardless of whether you caused it. If you are so willing, then grab your pen and sign on the dotted line. If you feel uneasy, however, you should push to renegotiate that contract to a liquidated damages clause, limiting your payments to project delays for which you are solely responsible.

The solution is at once profoundly simple and yet difficult in practice. Just don’t sign a contract with a dangerous liquidated damages clause in it; renegotiate it. Simple, right? “But Jeremy,” some of my clients have sagely remarked, “I don’t want to hurt my company’s relationship with the client who wrote the contract by making waves.” Here’s where things get difficult. If you sign a Broad Form Liquidated Damages Clause, you are taking on the risk of losing money for any delay on the project, regardless of who or what causes it . Do you trust every other subcontractor on a project not to delay the project? Do you trust the general contractor not to delay the project? Do you trust the weather? Suppliers? Permitting authorities? Delays caused by

If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book “The Subcontractor’s Roadmap to Getting Paid for Extra Work” by emailing me at jwyatt@harrisonlawgroup.com.

-Jeremy Wyatt

jwyatt@harrisonlawgroup.com

www.HarrisonLawGroup.com

(410) 832-0000

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