The Internet is getting bigger today. Big Time. Should you claim your share?

The day that we have talked about for more than two years is finally here.  ICANN - the non-profit corporation in charge of assigning domain names - is throwing open the doors and allowing a slew of new domain name naming conventions.  The Internet is about to get huge (er). Up until now, web sites were limited to such generic top-level domains (gTLDs) such as ".com", ".net", and ".org".  The group added more in the past few years including ".xxx", ".biz", and others, but now they are allowing customized gTLDs.  It could be a brand (.mcdonalds), an organization (.youthhockey), or just about anything else.  Approved applicants will maintain that gTLD and use it to host all of their company information, control who has access to the name, and even be able to sell space in the gTLD.

But before you jump to register ".thing", the registration process alone will cost you at least $185,000 plus the investment in maintaining your little slice of the web.  However, if you are a business or a group with the resources, it could be an invaluable new way to maintain your presence on the Internet.

How much should companies pay for work from first-year associates?

The war against lawyers has begun.  Well, more specifically, its a fight against over-priced legal services.  According to the Wall Street Journal:

More than 20% of the 366 in-house legal departments that responded are refusing to pay for the work of first- or second-year attorneys, in at least some matters.

Many corporate counsels are arguing that they should not have to pay $300 per hour to have a newly-minted lawyer learn how an asset purchase agreement works.  This was less of a problem in the past when the rates for junior attorneys was low and competing resources sparse.  But with the "businessification" of the legal industry over the past couple of decades, hourly rates for associates have skyrocketed along with ballooning salaries (and increased per-partner profits), as the Internet and mobile technologies have empowered corporate counsel to find pragmatic alternatives.

At the same time, companies are spending more than ever on outside counsel for their legal services, even as the economy struggles to recover.  In this article from the ABA Journal, corporate counsel are seeing legal bills rise.  What's even worse:

The dramatic increase in attorney fees and other litigation costs came despite reports of a decline in litigation last year from the same group of respondents.

That is why many are taking a practical approach and looking for alternative fee arrangements and more sensible billing.  And some law firms are hearing the call (including my firm).  However, a system that has been entrenched in our society for generations is not going down easily.  As noted in the WSJ article, the chairman of K&L Gates LLP, a law firm with over 1900 attorneys around the world, says that corporate counsel are blowing this out of proportion and should resist the urge to change:

“It’s a bargain made throughout the generations that has served democracy and capitalism well.”

Yeah, good luck with that.

How the U.S. Can Avoid Another Recession (assuming there is leadership to do it)

Even as Washington gridlock becomes the norm, ideas continue to circulate about kickstarting the sputtering U.S. economy.  Everyone seems to agree that startups and other small businesses will lead a renewed hiring boom and increase demand, but not everyone is in agreement about how to get there. There are some ideas, however, that continue to move forward.  Jeff Bussgang of Boston's Flybridge Capital Partners has highlighted some of them recently in an article that is worth reading, and points out this remarkable stat:

The Kauffman Foundation's research on this matter is clear: From 1997 to 2005, job growth in the US was driven entirely by start-ups.

The Startup Visa and government investment in innovation were also topics of this blog in that past in addition some other ideas like the green card visa.  The U.S. needs to make it easier for businesses to start here, and then make sure that we attract as many of the world's leading scientists and entrepreneurs to make it happen.

As Congress dithers over process and campaign year politics, it is hard to understand why there is not more urgency on this vital area of economic development.

Still Time to Take Advantage of Tax-Free Investment in Small Business Stock

With all of the uncertainty in the markets recently, now is a great time to take another look at one way to create jobs with tax free investment. But you only have a few more months to take advantage of it. Remember the Small Business Jobs Act of 2010?  How about the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2011?  Well, if you are a small businesses, a provision of these laws give investors, founders, and other stockholders the right to purchase certain types of small business stock and then sell that stock with tax-free gains of up to $10 million, provided you act quickly and then exercise a little patience.

United States Code Section 1202 was revised to exclude 100% of gains from the sale of "qualified small business stock" and that exclusion counts for both income tax and alternative minimum tax purposes.  But here is some fine print:

• the company must be a C corporation (if you are taking advantage of the flow-through tax treatment of an S corp, you are out of luck);
• the stock must be acquired between September 27, 2010 and January 1, 2012, and must be held for five years before being sold;
• and at least 80% of the assets of the company must be used for one or more qualified businesses.

There are other provisions that may apply to your company as well, so you should review this carefully with your legal and accounting advisors.  But for those companies that meet the conditions, now could be the time to take advantage this temporary opportunity.

Should Massachusetts non-competes be voided?

Non-compete agreements are getting more attention, this time from Scott Kirsner in The Boston Globe today who urges for more common sense:

On a weekend when we celebrate American independence - and all of the blood and sweat that gave us the right to life, liberty, and the pursuit of happiness - I think it’s time for a declaration of a different sort. It is talented, smart, and driven people who make Massachusetts one of the most innovative places on earth. Our residents ought to be able to take their skills where they want and start companies when they want.

I agree with Scott that non-competes can hamper innovation, and have written about their effect. What is telling in Kirsner's article is a quote from an industry trade group about non-competes:

But most business groups oppose significant changes to the status quo. "Our members strongly feel that when they make an investment in an employee, it needs to be protected as it is under current law," says Brad MacDougall, at Associated Industries of Massachusetts, a trade group.

Companies should be more concerned about protecting their own intellectual property than preventing a former employee from taking another job, particularly when that employee gets laid off and is struggling to find work in this economy.  Because at the end of the day, the companies that win should be the ones that innovate better, not the ones who lock up the most people.