September 2019 Te Contractor’s Advantage
www.HarrisonLawGroup.com (410) 832-0000 jwyatt@harrisonlawgroup.com
The Transition Into Fall
As much as I love to get out into nature, Maryland summers mean I tend to spend a little more time inside than I do outside. But come fall, that changes. When the weather cools down and the days get shorter, I like to start hiking again. One of my favorite local places to hike is Cromwell Valley Park, which is where you’ll find Willow Grove Nature Center. It’s not far from the office, and it’s always a great place to take the kids so they can run around and explore. I like Cromwell Valley Park because it has well-maintained trails that weave in and out of the surrounding forest. You never really have to worry about uneven trails or surprises along the away, which makes it even better for kids. The fall also means apple picking and pumpkin patches, two things my kids really love to do. The kids love eating apples off the trees, and we usually get a bunch of apples to take home and use however we want. While pumpkins aren’t quite as useful, you can be sure we’ll have some in time for Halloween next month. Getting out in the fall also means taking in all the vibrant colors. We are fortunate to live in an area where all four seasons are so prominent, and it’s nice to watch as the leaves turn from green to yellow, orange, and red over a span of several weeks. It adds a spot of color that’s often missing during the rest of the year. Plus, I love to feel the cool air after a hot summer because it means you can spend more time outdoors in the afternoon!
In the office, we also experience something of a seasonal transition. A lot of people are getting back to work and into the swing of things again. After a summer filled with vacations and breaks, people buckle down and get to work, and more often than not, this includes construction projects. We often get more phone calls in the fall for construction projects. People are running into various issues or noticing things that are just now crossing their desk. Generally, it's payment disputes, but there’s really no shortage of issues that can crop up on a construction project. For me personally, I’ve had various transitions over the course of my career. One big change was moving from litigating to building up a practice. It was challenging to make that transition because I have a very particular way I litigate, so it was something I found difficult to delegate to others.
That was something I had to learn as a professional: how to delegate casework while building a practice and still providing high-quality work. As challenging as it was, I found a way to balance it all. I still wouldn’t call it easy, but it has gotten easier, and I have been able to delegate while maintaining the high standards our clients expect.
-Jeremy Wyatt
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How to Effectively Protect Your Intellectual Property INTELLECTUAL PROPERTY AND YOUR BUSINESS
BUILD A MILLIONAIRE’S LIBRARY Book RecommendationsFrom the Ultra Successful
Intellectual property is defined by Merriam-Webster as “property (such as an idea, invention, or process) that derives from the work of the mind or intellect.” As you can no doubt glean from this definition, intellectual property can be a lot of things, so it’s important to identify and protect you and your business’s intellectual property. Here are the main categories and protections for your company’s creations. TRADE SECRETS A trade secret is any useful piece of information that the public doesn’t know about and the owner has taken steps to protect. If you have taken the steps necessary to protect your own trade practices, you may have a case if you ever discover your trade secret has been leaked. Having your employees sign a nondisclosure agreement (NDA) is a great way to initially establish your unique business practices as trade secrets. TRADEMARKS The name of your business, product, or service — anything a customer uses to identify a product — generally requires a trademark. This may include your company’s name, product name, etc. Think of the distinctive Nike “Swoosh” and the familiar ending sound of Dell’s commercials. To properly protect your trademark, file a trademark application to have it registered. COPYRIGHTS Most people seek protection under copyright law for a variety of things related to their product or business, like images, specific words on packaging, labeling, the actual product, and the business webpage. The best thing about copyright registration is that it’s inexpensive. Plus, the law allows you to demand attorney fees from those who infringe on your copyright. PATENTS Patents are a fantastic way to protect your designs, and companies have utilized patents to maintain their competitive advantage. A great example of this strategy is when Sony Pictures patented their animation style for “Spider-Man: Into the Spider Verse” which grossed over $375,502,565. There are two types of patents: one for utility (function) and one for design (aesthetic). To apply for a patent, register with the United States Patent Office. Regardless of the type of intellectual property you have, it’s important you identify what type it is and which type of protection is most appropriate. Even a small amount of intellectual property is worth protecting, so start the process now to safeguard it.
What does every successful person have in common? They read. Avid reading is a key characteristic of the ultra successful because, through great ideas, you can learn how to achieve your full potential. If you want to be more successful in business and in life, you should definitely add these great books to your reading list. ‘Business Adventures: Twelve Classic Tales From the World of Wall Street’ by John Brooks Who read it? Bill Gates, founder of Microsoft Famously loaned to Bill Gates by Warren Buffett himself, “Business Adventures” was written and originally published shortly after the stock market crash of 1962. In this book, John Brooks recorded the successes and failures of 12 major companies of the era, including Ford, Xerox, and General Electric. From 1903–1908, renowned German poet Rainer Maria Rilke wrote letters to a young, aspiring poet. These candid thoughts from one of the greatest artistic minds offer insights on life, love, and how to fully experience the world we live in. Each letter is a valuable reminder that we should never underestimate our own artistic spirit. ‘It's Not About the Coffee: Leadership Principles From a Life at Starbucks’ by Howard Behar Who read it? Katrina Lake, founder and CEO of Stitch Fix Starbucks is known for its quick coffee and seasonally controversial cups, but that’s not what turned the company into a world-conquering success. In “It’s Not About the Coffee,” Howard Behar highlights the importance of company culture and the role business leaders play in helping their team members reach their full potential. ‘Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration’ by Ed Catmull With Amy Wallace Who read it? Mark Zuckerberg, co-founder and CEO of Facebook Ed Catmull, co-founder of Pixar, is responsible for some of the most successful animated movies in the history of cinema. “Creativity, Inc.” explores the creative process behind such films and how this process can be replicated in any industry. Forbes has suggested that Catmull’s book “just might be the best business book ever written.” ‘Letters to a Young Poet’ by Rainer Maria Rilke Who read it? Jen Rubio, co-founder and president of Away
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Recognition, Flexibility, and Purpose
3 Tips for Attracting Millennial Employees
CREATE A SENSE OF PURPOSE More than anything, millennials are looking for some level of personal fulfillment — not just a paycheck. Create a brand story and work culture that expresses a greater purpose for prospective employees to get behind. Set high standards for the culture you want to create and maintain those standards. If you do this right, the talent you’re looking for will come to you. Just because millennials want more flexible work schedules and individual recognition doesn’t mean they aren’t willing to work hard. In fact, the opposite is true. By adapting your company culture to suit their lifestyle preferences, you can make sure your younger employees take an interest in your business and stick around.
HAVE A Laugh DITCH THE 9-TO-5 STANDARD Offering more flexible work hours is a start, but if you really want to attract millennials, then your entire work environment should embrace modernity. Have the latest tech and tools for day-to-day operations, offer frequent opportunities for promotions and raises, avoid micromanagement, and give your young employees room to learn and grow. You might have heard people call millennials lazy, entitled, and afraid of long-term commitments, but that trend is starting to shift. Today, businesses can’t afford to write off millennials because they actually make up a major percentage of the workforce. According to the Pew Research Center, there were 56 million millennials either working or looking for work in 2017, making up 35% of the labor force. When so much of the country’s available labor is part of one demographic, you must ask yourself this question: How do I get millennials to work for me? CATER TO THE INDIVIDUAL Millennials don’t want to be just another cog in the machine. They want to work somewhere that values their unique skills and lets them use those skills effectively. When seeking millennial talent for your company, highly specific job listings will attract exceptional employees. Once they’re on board, be sure to nurture their skill set. Give them a chance to grow with your company, and they’ll be sure to stick around.
PUZZLE
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o
Jeremy Wyatt jwyatt@harrisonlawgroup.com www.HarrisonLawGroup.com (410) 832-0000
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Inside This Edition
1.
The Transition Into Fall
2.
Types of Intellectual Property
A Reading List for Real Success
3.
How to Attract Millennials to Your Business
Have a Laugh
* 4.
Automation Has Come to Small Business
Level With Me: Three Construction Law Lessons
Let the Robots Do It Running a small business means wearing many hats. More often than not, CEOs find themselves moonlighting as marketers, customer service specialists, human resources representatives, project managers, and just about any other job that needs doing. That’s why more and more entrepreneurs are exploring automation to free up their time and focus on growing their business rather than just keeping it afloat.
Automation Has Come to Small Business manager have been automated thanks to applications like Apptivo. With features to track tasks and submit timesheets, this scalable tool allows everyone to stay up to date on the logistics of business and make coordination a breeze. RESPONSE TIME IS EVERYTHING Many small businesses hesitate to bring “bots” into customer- facing operations because they don’t want to lose their human touch. But humans are busy, and an unanswered request for a quote or a delayed response to a question will quickly give current and potential customers a bad impression.
AUTOMATION ON YOUR LEVEL In the past, automated systems were solely within the purview of big businesses. Applications for organization were either too expensive or too wide in scope to fit the needs of smaller companies, but those days are over. Plenty of tools have been developed to help you and your team reduce workloads and run more efficiently, no matter your company’s size. REDUCING THE CHAOS Unless your business is large enough for several project managers, chances are that every employee is responsible for their own organization. This quickly leads to miscommunication, conflicting schedules, and roadblocked projects. Thankfully, many basic functions of a project
That’s why software like Keap exists. Keap allows you to send automated email responses at the first point of contact. This message can be as simple as an acknowledgement that their message was received and will be answered soon. The important part is that your customers are reassured that they are being heard.
Far from making your business more robotic, automated tools allow your team to focus on what
they do best. That means more time for thoughtful customer service emails, personalized interactions with customers, and well-executed projects. That’s something you and your clients will appreciate.
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September 2019
Level With Me By JeremyWyatt
Three Construction Law Lessons I Learned From the Last Recession
Every time I pass a TV tuned to any news channel nowadays, the ticker says, “Recession, Recession, Recession!” Add to that the fact that architectural firms appear to be billing less and less each month this year, and I am starting to worry about a recession in the construction industry. The reduction in architectural billings is particularly indicative, as new projects require architects to plan them, so, when architects are billing less, it means they are planning fewer future construction projects, which means there will be less construction work in the future (at least temporarily). If indeed a construction industry recession is coming, here are three lessons that I learned from the last recession and its aftermath. Lesson 1: Beware the Risk of Reaching. The parable of Icarus flying too close to the sun, his “wings”melting, and him subsequently falling fatally into the sea is apt here. In the last recession, I saw construction contractors reaching too high to sign contracts that were either beyond their capabilities or contained unconscionable contract terms. Both of those situations caused disastrous consequences for contractors. In the former situation, I saw, for example, a trade contractor sign the biggest contract in the company’s history just as the recession of the late-2000s began to hit, hoping to extend the glory days of big profits that the company enjoyed in the mid-2000s. The problem was that the contractor simply didn’t have the manpower to self- perform this huge new contract, and the recession was eliminating labor subcontractors that it otherwise could have used. The result was that this company’s performance petered out midproject, its
bond was called, and the company (and its owner) had to declare bankruptcy. In the latter situation, I saw a well-established general contractor sign a contract to construct a project that was right in its wheelhouse in terms of size and location. Unfortunately, it signed the contract at a time during the last recession when work was scarce, so this general contractor essentially agreed to every single unfair term that the owner wanted. When the project developed major problems stemming from delays by the architect, those unfair contract terms pushed the problems down to the general contractor, who took a multimillion-dollar pay cut to the project’s profits in order to get paid at all. If either of these contractors (or many others!) had buckled down and continued to do business in the way they always had before the last recession, they wouldn’t have had these monumental issues. Lesson 2: Prepare for Contraction. To keep a business running smoothly without reaching, it likely will be helpful to prepare for a contraction in your business’s revenue. The traditional wisdom is that, on average, construction business revenues contract about 30% during a recession. To my simplistic business mind, a 30% reduction of revenues is handled most easily by a 30% reduction in expenses. For construction companies, much of the expenses related to construction projects (material and labor) will handle themselves by
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virtue of fewer projects worked, and, thus, less material and labor required. But the 30% reduction of expenses needs to extend to the home office as well. Monthly or yearly expenses, and especially payroll for home office employees, need to contract apace with revenue contraction. Obviously, this can lead to some very uncomfortable decisions about what to “cut,” but, at least to my mind, there is not another way to move through a recession without surplus risk or deeply cutting profits. Lesson 3: ‘There’s Always Money in the Banana Stand!’ Forgive the “Arrested Development” reference, but the point is that even in the depths of a recession, there are consistent sources of funding to pay you for construction work. First, even if the general contractor you are working for (or the subcontractor working for you) experiences financial distress sufficient to disrupt a project, a surety bond can protect you. In the aftermath of the last recession, I sued more bonds than contractors and collected a lot of money that otherwise would have been uncollectible.
Second, people still pay taxes during a recession, meaning that government projects are still likely to be funded and paying contractors normally. Ramping up to add a measure of state or federal work to your rotation when you are worried about a recession is probably worth the attendant hassle (such as slow pays, REA nonsense, and endless regulations). Third, you can always file a mechanic’s lien for nonpayment. Regardless of whether the general contractor (or even the owner) is out of money, there likely is still significant value in the construction project itself. With a mechanic’s lien, you can have that project sold at auction to pay your bills. If indeed the doom-and-gloomers are correct, now may be a good time to: 1) confirm your qualifications for state or federal work; 2) start asking up front for bonds on new projects; and 3) become familiar with the mechanic’s lien deadlines for the states in which you work.
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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