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Entries by Michael Moradzadeh

Rimon Listed in U.S. News and World Report’s Best Law Firms for Seventh Consecutive Year

News Michael Moradzadeh Michael Moradzadeh · August 29, 2017
San Francisco, CA -- Rimon, P.C. is proud to announce that it has been recognized in the 2018 edition of U.S. News and World Report's and Best Lawyers list of "Best Law Firms" for the seventh consecutive year. Rimon Partners in six U.S. states as well as in Israel were also honored by Best Lawyers in 2017. Rimon P.C. is

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Rimon Wins Six ACQ5 Global Awards, 2017

News Michael Moradzadeh Michael Moradzadeh · James C. Chapman James C. Chapman · John R. Mussman John R. Mussman · August 11, 2017
We are delighted to announce that ACQ5 (Acquisition Finance Magazine) recognized Rimon, two of its partners, and Rimon's CEO with six awards. Rimon was named the US Compliance Law Firm of the Year, California Technology Law Firm of the Year, and California Sports & Entertainment Law Firm of the Year. Additionally, Michael Moradzadeh,

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Will All Law Firms Eventually Go Virtual? Live Interview Between Rimon’s CEO and Above The Law

News Michael Moradzadeh Michael Moradzadeh · July 24, 2017
Rimon’s CEO, Michael Moradzadeh, was interviewed by Above The Law in a live discussion about what motivated him when he and Yaacov Silberman founded a new law firm with a highly innovative business model. Michael spoke about the overhead burden that big law firms carry with their lavish (but fundamentally unnecessary) real estate, the rigid

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Rimon Law Named Technology Sector Law Firm of the Year in California 2017 by Global Law Experts Awards, Again

News Michael Moradzadeh Michael Moradzadeh · June 14, 2017
We are pleased to announce that Rimon Law was selected as the Technology Sector Law Firm of the Year in California in 2017 by Global Law Experts, again. Rimon Law was also named Technology Sector Law Firm of the Year by Corporate INTL in 2016. For the 8th Annual Global Law Experts Awards, the extensive nomination and

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How to Telecommute Without Being Remote

Insight Michael Moradzadeh Michael Moradzadeh · May 10, 2017
In this article published in Law360, Rimon’s CEO Michael Moradzadeh argues that allowing lawyers to work remotely can be counterproductive if the firm's entire model and culture does not ensure that telecommuters are equally connected to the firm's social and professional communities. “To take full advantage of the

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Rimon Op-ed in Law360: A time bomb for law firms, mismatched assets and liabilities

Insight Michael Moradzadeh Michael Moradzadeh · Thomas M. White Thomas M. White · March 14, 2017
In this Law360 Op-ed, Rimon's Thomas White and Michael Moradzadeh argue that law firm management has a particularly critical task: managing the magnitude and longevity of firm assets and liabilities. The firm that fails to balance these factors skillfully may find it difficult to attract and retain talent. "Many commentators have

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Rimon named “Technology Sector Law Firm of the Year in California” again by Corporate INTL.

News Michael Moradzadeh Michael Moradzadeh · January 10, 2017
Rimon Law won, for the second consecutive year, the Technology Sector Law Firm of the Year in California award granted by Corporate INTL magazine's 2016 Global Awards. This award joins Best Lawyers, Super Lawyers, the Financial Times, Harvard Business Review and many others which have recently recognized Rimon for excellence and

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Rimon’s CEO Michael Moradzadeh will be presenting at Accenture’s Global Centre for Innovation in Dublin on December 14, 2016.

Event Michael Moradzadeh Michael Moradzadeh
Dec 14, 2016

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Mr. Moradzadeh will be speaking on the changing landscape of the legal industry and what legal services will look like in the next 5 years. He will be part of an expert panel configured, among others, by Associate Dean of the Stanford Law School and other entrepreneur/academics like Roland Vogl.

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Financial Times commends Rimon in its list of the six “Most innovative North American law firms 2016: Redesigning the service model”

News Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman · December 07, 2016
December 6, Rimon was honored among North America’s leading innovative law firms in The Financial Times’ Innovative Lawyers 2016 report released Dec. 6. The report recognizes law firms that have successfully innovated and adapted their legal services to serve clients’ business interests and respond to 21st-century

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Rimon again named on U.S. News and World Report’s 2017 edition of “Best Law Firms”

News Michael Moradzadeh Michael Moradzadeh · November 01, 2016
Rimon recognized for 11 national practice areas in the US News and World Report’s Best Law Firms ranking. San Francisco, CA -- Rimon, P.C. is proud to announce that it has been recognized in the 2017 edition of U.S. News and World Report's and Best Lawyers list of "Best Law Firms" for the sixth consecutive

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Rimon Ranked in Top 25 Fastest Growing Law Firms in Law Firm 500 List

News Michael Moradzadeh Michael Moradzadeh · November 01, 2016
Rimon Law Ranked #23 fastest growing firm in the national law firm 500 list. This award is a testament to the trust our clients have put in us. The published list recognizes law firms that have achieved significant growth in revenues. Each nominee was evaluated by an outside accounting firm, and subjected to an identical review process.

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Entrepreneurship in Law Conference, Santa Clara Law School

Event Michael Moradzadeh Michael Moradzadeh
Oct 20, 2016 12:00PM - 1:00PM PST

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Rimon Founder and CEO Michael Moradzadeh will be speaking at Santa Clara Law School on the business dynamics of a law firm. Mr. Moradzadeh will explain his experience working in Big Law and how that led him to find the opportunity in the marketplace to found a modernized and improved law firm. He will also discuss how Rimon’s business system is

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Rimon Law Selected as one of Acquisition International (AI) Top 50 Legal Elite Firms.

News Michael Moradzadeh Michael Moradzadeh · October 03, 2016
Legal Elite Awards honors the firms, lawyers, and attorneys that make their mark within the industry and who set the standard for their peers and competitors. The awards focus on rewarding excellence across all areas, ranging from real estate to mediation. AI closely monitors all sectors to ensure that the most deserving ones are

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Why Traditional Law Firms Reject Flat Fee Billing - Law360 Article by Rimon’s CEO

Insight Michael Moradzadeh Michael Moradzadeh · July 17, 2016
Rimon's Founding Partner and CEO, Michael Moradzadeh, writes about the benefits of flat fee billing for clients, lawyers, and law firms in this article published in Law360. He also shares why the pyramid model of traditional law firms center on hourly billings of associates and junior partners, making flat fee billing and

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Forbes Article by Rimon CEO:  Law Firms Join The Destructive Dance To Higher Associate Salaries

Insight Michael Moradzadeh Michael Moradzadeh · July 15, 2016
(Go directly to article in Forbes here.) In the most enduring and infamous comment from the subprime meltdown, former Citigroup CEO Chuck Prince explained away his company’s disastrous leveraged lending before the crash with the comment that “as long as the music’s playing, you’ve got to get up and dance.”

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Rimon Law Named Technology Sector Law Firm of the Year in California 2016 by Global Law Experts Awards

News June 24, 2016
We are pleased to announce that Rimon Law was selected as the Technology Sector Law Firm of the Year in California in 2016 by Global Law Experts. Rimon Law was also named Technology Sector Law Firm of the Year by Corporate INTL in February. For the 7th Annual Global Law Experts Awards, the extensive nomination and research

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Are Law Firm Mergers Good for Clients and Lawyers?

Insight Michael Moradzadeh Michael Moradzadeh · June 15, 2016
Only a few years ago, a firm with 300 lawyers was considered very large. However, the legal world has grown used to seeing firms with over 5,000 lawyers. This is due to the rise of mega-firms due to a growing "grow or die” policy by law firms looking for a response to a rapidly changing business world. But is it working?  The same

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Is the Traditional Law Firm Compensation System Hurting Clients, Lawyers, and Law Firms?

Insight Michael Moradzadeh Michael Moradzadeh · June 01, 2016
The start of a new year is always a time for big changes in a law firm partner’s life. Suddenly, lawyers get to meet all new people. Why? Because the start of the year is when laterals — partners and associates — start jumping firms. This is not due to exciting New Year’s resolutions to meet new people or try out new

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Rimon Op-Ed is Top Story in Law360: Big Law’s Perverse Incentive System

Insight Michael Moradzadeh Michael Moradzadeh · February 26, 2016
Rimon CEO Michael Moradzadeh’s detailed analysis of the dangerous incentive systems that law firms use to pay associates and partners has rocketed to the top of Law360’s Most Read articles list. Michael examines how firms are putting themselves in danger by distributing big payouts at the beginning and end of the year. Michael notes

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Rimon Law Named “Technology Sector Law Firm of the Year in California” by Corporate INTL.

News Michael Moradzadeh Michael Moradzadeh · February 14, 2016
Rimon Law won the Technology Sector Law Firm of the Year in California award granted by Corporate INTL magazine's 2016 Global Awards. This award joins Best Lawyers, Super Lawyers, the Financial Times, Harvard Business Review and many others who have recently recognized Rimon for excellence and innovation. Corporate INTL independently judges

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Rimon Law Named by U.S. News and World Report’s “Best Law Firms” for Fifth Consecutive Year

News Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman · January 20, 2016
New York, NY -- Rimon, P.C. is proud to announce that it has been recognized in the 2016 edition of U.S. News and World Report's Best Lawyers "Best Law Firms" for the fifth consecutive year. Partners in five of Rimon's offices were also honored by Best Lawyers this year. Rimon was ranked in Best National

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The Bitter Pill Of Competition Within Large Law Firms - Rimon’s Law360 Article

Insight Michael Moradzadeh Michael Moradzadeh · Bernays T. (Buz) Barclay Bernays T. (Buz) Barclay · November 02, 2015

On October 19, 2015 the following article written by Rimon's Michael Moradzadeh and Buz Barclay was published in Law 360. You can also see the article on the Law 360 site here.

Earlier this year an International Trade Commission Law Judge found that Dacheng Dentons, a 6,000 + lawyer enterprise structured as a Swiss verein, holds itself out in its marketing to be a single, global law firm.

Well, of course it does. Convincing clients, and lawyer recruits, that you are a huge law firm is pretty much the whole point of being huge. In pursuit of the largest companies with the largest, highest value engagements, and in pursuit of ambitious legal talent, size matters. The vereins are hugely successful at it so far, but they are hardly unique in seeking hugeness recognition.

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Law360 Features Rimon’s Flexible Business Model in Article Named “BigLaw Facing Talent Drain As Men Flee For Flexibility”

News September 01, 2015
Rimon's flexible approach to the sophisticated practice of law was featured in the Law360 report named BigLaw Facing Talent Drain As Men Flee For Flexibility by Andrew Strickler. To read the article, click here.

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Harvard Business Review Points to Rimon in Piece on New Model Law Firms

News September 01, 2015
Harvard Business Review featured Rimon as a disruptive innovator competing successfully for legal matters that require high-level expertise in its article titled Law Firms’ Grueling Hours Are Turning Defectors into Competitors by Joan C. Williams.

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UC Hastings Law School Study on Disruptive Innovation, New Models of Legal Innovation Features Rimon

News September 01, 2015
UC Hastings Law School released a study on disruptive innovation in the law firm model named Disruptive Innovation, New Models of Legal Practice by law professor Joan C. Williams. The report highlighted Rimon's innovations with its spherical structure, alternative billing, flexible work environment, collaboration,

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Rimon’s website named best law firm website by One400

News Michael Moradzadeh Michael Moradzadeh · June 16, 2015
One400 named Rimon's website as one of the top four law firm websites. According to One400 Rimon's site "is one of the first law firm websites we have come across that features a full-page background video which quickly sends a message that this law firm is innovative and different. Adding to the dynamism of the homepage, the

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Rimon, P.C. and Excello Law announce Transatlantic US/UK Alliance

News Michael Moradzadeh Michael Moradzadeh · June 01, 2015

Top entrepreneurial firms work to strengthen cross-border capabilities for clients; Alliance will have offices throughout US, UK, Sweden and Israel.

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Rimon’s Michael Moradzadeh writes in Law360 about moving beyond the grow or die law firm model

Insight Michael Moradzadeh Michael Moradzadeh · March 17, 2015
Law360 published a recent article by Rimon, P.C. CEO Michael Moradzadeh examining how the traditional law firm model is withering on the vine. The piece, which was one of the site's 10 most widely read articles of the week, notes that despite recent mega-mergers, law firms remain a “hierarchical structure…a legacy of feudal

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Time for a New Kind of Law Firm

Insight Michael Moradzadeh Michael Moradzadeh · February 02, 2015
The traditional law firm is based on an outdated feudal system that creates inefficiency, unhappy lawyers, and underserved clients. Adopting business models from other industries, cloud computing, and virtualization has allowed for new law firm models. These models allow attorneys better lives through increased freedom and productivity,

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Law Firm 3.0: Thinking Beyond the Virtual and Conventional Models

Insight Michael Moradzadeh Michael Moradzadeh · January 05, 2015
Cloud technology allows attorneys to work anywhere they have a secure internet connection. This provides for greater flexibility, happier lawyers, higher profits, and better-served clients. However, a pure virtual law firm is not the answer. Cafes might work for some meetings, but often a brick and mortar office is necessary. Law

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Rimon, P.C. honored again by Financial Times Innovative Lawyers Report

News Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman · December 08, 2014
December 8, 2014 -- New York, NY -- Rimon, P.C. is proud to announce that it has been honored in the 2014 Financial Times North America Innovative Lawyers Report for its innovations in collaboration. Rimon was recognized for its innovative spherical business model by the same publication in 2012. The report commends Rimon for the development

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Convergence: Growing Dissatisfaction with Biglaw and the Rise of the Alternatives

Insight Yaacov P. Silberman Yaacov P. Silberman · Michael Moradzadeh Michael Moradzadeh · November 14, 2014
Presentation by Rimon, P.C. CEO, Michael Moradzadeh and COO, Yaacov Silberman Evolutions in technology, the economy and business culture are forcing a change in the legal industry. Rimon’s CEO and COO share how Rimon and other alternative legal services companies are changing the way lawyers practice law and how clients are ultimately the

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Webinar - Alternative Law Firms and Service Providers

Event Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman
- UTC

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Presentation by Rimon, P.C. CEO, Michael Moradzadeh and COO, Yaacov Silberman Evolutions in technology, the economy and business culture are forcing a change in the legal industry. Rimon’s CEO and COO will share how Rimon and other alternative legal services companies are changing the way lawyers practice law and how clients are ultimately the ones

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Rimon’s 2014 Complimentary CLE/CPE Webinar Series

Event John Isaza John Isaza · Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman · David A. Fruchtman David A. Fruchtman
Nov 11, 2014

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Rimon's 2014 CLE webinar series covers a wide variety of topics relevant to today's legal climate. In the first week, we will explore the effects of changes to the Federal Rules of Civil Procedure with Partner John Isaza and dive into exciting changes in the law firm model with CEO Michael Moradzadeh and COO Yaacov Silberman. During the

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Rimon’s Michael Moradzadeh talks to Law360 about innovations in the law firm model

Insight Michael Moradzadeh Michael Moradzadeh · June 23, 2014
Rimon's CEO Michael Moradzadeh was featured in Law360 discussing the changes in the law firm model, and why firms like Clearspire had some great features, like decentralization, top-level attorneys, and embracing technology, but ultimately did not succeed because they were not run by lawyers. Mr. Moradzadeh argues that Rimon's hybrid

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Stanford Law School Presentation on Innovations in Law Firm Model by Rimon’s Managing Partners

Event Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman
- UTC

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Rimon's Managing Partners Michael Moradzadeh and Yaacov Silberman will discuss innovation and disruption in the law firm space at The Center on the Legal Profession Stanford Law School. They will discuss the history of innovation in the traditional legal marketplace, the current landscape as alternative models have rapidly increased their presence,

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Rimon’s Managing Partners Speak at Harvard Law School about Alternatives Law Firm Models

Event Michael Moradzadeh Michael Moradzadeh · Yaacov P. Silberman Yaacov P. Silberman
Oct 29, 2013 9:00AM - 10:30AM PST

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Rimon's Managing Partners, Michael Moradzadeh and Yaacov Silberman, presented the evolution of the elite law firm model, and the alternative models that have developed in recent years, at Harvard Law School. Learn more about event here. Harvard presentation on evolution of BigLaw and the rise of alternative law firm models from rimonlaw

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Independent Contractor Versus Employee: New Law Ups the Ante for Misclassification

Insight Michael Moradzadeh Michael Moradzadeh · November 27, 2011

This blog post was prepared by Inna S. Wood and Michael Moradzadeh. 


Approximately one month is left for California employers to revise their employment contracts. The bill (SB 459) introduced by Senator Ellen Corbett on February 16, 2011 on employees’ misclassification was signed into law by California Governor Jerry Brown on October 9, 2011. It adds two new sections to the California Labor Code (i.e., Sections 226.8 and 2753) which establish the liability of employers for misclassifying their employees as independent contractors. The law becomes enforceable on January 1, 2012.

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SEC Loosens Control on Shareholder Limit under the Private Company Flexibility and Growth Act

Insight Michael Moradzadeh Michael Moradzadeh · November 01, 2011

This blog post was prepared by Inna S. Wood and Michael Moradzadeh.

The Private Company Flexibility and Growth Act (H.R. 2167), referred to as the “Facebook Rule” by many internet bloggers, was introduced in the House by Rep. David Schweikert (R-AZ) on June 14, 2011. Its main theme is to increase the shareholders of record threshold requiring the mandatory registration of a private company with the SEC from 500 to 1,000 shareholders. The act modifies the original shareholder limit that was established by Section 12 (g) of the Securities Exchange Act in 1964 and has not been revised since. It also exempts accredited investors and employees from that count.

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Charge for Value not Time: Why Alternative Fee Arrangements Make Sense

Insight Michael Moradzadeh Michael Moradzadeh · July 18, 2011

A business is defined by what it sells. A fairly obvious proposition, one would think. Well, then, what is it that law firms sell? The obvious answer should be solutions to legal problems. But, too many law firms are not in the business of selling those services, they are oddly in the business of selling hours.

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Alternative Fee Arrangements

Insight Michael Moradzadeh Michael Moradzadeh · June 30, 2011

The most radical changes in law firm billing which have occurred during the last two years has been the advent of value billing Alternative Fee Arrangements (“AFA’s). These billing arrangements are aimed at destroying or at least seriously maiming the invidious hourly billing process, which creates economic incentives for inefficiency. The hourly rate may be either dead, suffering a lingering death or in a simple state of somnolence, depending only on whether the observer is an optimist, a pragmatist or an ostrich.

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The Life and Death of the Billable Hour

Insight Michael Moradzadeh Michael Moradzadeh · June 13, 2011

The evolution of alternative fee arrangements and value billing.

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An alternative to the Traditional Law Firm Business Model

Insight Michael Moradzadeh Michael Moradzadeh · June 09, 2011

The traditional top-tier law firm model is based on a business structure of years gone by. Consequently law firms are operating inefficiently and in an antiquated fashion. This leads to under-served clients and a high rate of dissatisfaction among top-tier lawyers.

There is a better way. By modernizing the law firm business model, and thus allowing attorneys more freedom to serve their clients, firms, attorneys, and clients will all benefit.

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Iran at a Political Crossroads

Event
May 24, 2011 7:00PM - 8:30PM PST

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Born to a family that traces its roots in Esfehan, Iran, Michael Moradzadeh will speak on how Iran has slowly evolved from a dictatorship to a participatory theocracy and the nature of the current conflict among political parties in Iran today. Michael Moradzadeh is a founder of the Rimon Law Group, the head of the International Delegation Group of the

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Real Estate Investments: Entities, Partnerships, and Groups - choosing the right vehicle for you

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Apr 14, 2011

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A discussion with real estate investors as to which entity choice is best for their investment vehicles.

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Time for a New Kind of Law Firm

Insight Michael Moradzadeh Michael Moradzadeh · March 10, 2011

The traditional law firm is based on an outdated feudal system that creates inefficiency, unhappy lawyers, and underserved clients.  Adopting business models from other industries, cloud computing, and virtualization has allowed for new law firm models.  These models allow attorneys better lives through increased freedom and productivity, and also allow for better client service.

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Beyond the Virtual Law Firm: Thinking Outside the Cloud

Insight Michael Moradzadeh Michael Moradzadeh · February 21, 2011

Cloud technology allows attorneys to work anywhere they have a secure internet connection.  This provides for greater flexibility, happier lawyers, higher profits, and better-served clients.  However, a pure virtual law firm is not the answer.  Law firms need to think outside the cloud: they need to utilize all the benefits of the 21st Century without throwing out the important aspects of traditional law firms in the process.

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Patent Infringement Damages May Now Be Calculated Differently

Insight Michael Moradzadeh Michael Moradzadeh · January 12, 2011

In Uniloc v. Microsoft, an appeals court issued a decision that may change how infringement damages are calculated by precluding the use of the "25 percent rule of thumb" which has been used to calculate damages in most patent cases for the past fifteen years.  This decision marks an important step towards requiring patent plaintiffs to rigorously prove damages with facts connected to the value of the patented invention, and it is likely that future courts will more strictly scrutinize patent damages evidence. 

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How to Maintain Corporations and LLCs

Insight Michael Moradzadeh Michael Moradzadeh · March 19, 2010

Forming an LLC or a corporation is an important first step to achieving tax benefits and protection from liability.  In order to preserve these important benefits, however,  it is very important that your company is maintained properly. Otherwise, you run the risk that the separate nature of your company will be ignored by the IRS or a court of law.   While there is no substitution for the sound advice of experienced counsel, a few simple steps will help ensure that you reap the benefits of your LLC or corporation for as long as they exist. The minimum requirements for maintaining corporations and LLCs is that they must:  1) maintain adequate capitalization; 2) keep clean financial and legal records; and 3) be treated as separate and distinct from its owners.

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An LLC Can be Treated as an S-Corporation for Tax Purposes

Insight Michael Moradzadeh Michael Moradzadeh · February 02, 2010

An LLC can be treated as an S-Corporation for tax purposes if it makes an S-Corporation election as long as the entity meets the IRS criteria to be taxed as an S-Corp, files an S-Corp election and gets approved by the IRS to be taxed as an S-Corporation. Without an S-Corporation election, single member LLCs default to be taxed as sole proprietors and a multi-member LLCs defaults to be taxes as partnership since they are considered “disregarded entities”. However, if a single or multiple member LLC agreement meets the IRS criteria to be classified as a small business corporation, the S-corporation election is filed and gets approved by the IRS, then for tax purposes, not legal purposes the entity is an S Corp not a LLC.

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The Criteria for Being Classified as an S-Corporation

Insight Michael Moradzadeh Michael Moradzadeh · February 01, 2010

In order to be classified as an S-Corporation, a company must: be domestic, have no more than 100 shareholders, have one class of stock, all shareholders must be individuals, decedents’ estates, bankruptcy estates, trusts or tax-exempt charitable organizations, or wholly owned by another S corporation, and all shareholders must be residents of the United States (as defined by the tax code not immigration laws). Shareholders of an S-Corporation can not be financial institutions that use a reserve method of accounting for bad debts, companies taxable as insurance companies, taxable mortgage pools, or domestic international sales corporations. So, if a business entity meets these criteria it can be considered an S corporation by the IRS and taxed as an S corporation as long as the S corporation election forms are properly filled-out and approved by the IRS. Many states including California automatically give business entities an S-corporations tax status if it was approved by the IRS.

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The tax benefits of making an S-Corporation Election?

Insight Michael Moradzadeh Michael Moradzadeh · January 31, 2010

Many small business owners incorporate their businesses not only for legal protection, but also to reduce owners’ payroll taxes through S-Corp tax election with the IRS. One advantage of an S-Corp is that it gives business owners the ability to reduce their self-employment taxes. Any small business owner who has not made an S-Corp election and uses Schedule C for their personal tax return for 2010 is subject to both employer and employee FICA and Medicare payroll taxes at 15.3% up to $106,800, 2.9% Medicare for Schedule C net income greater than $106,800, and California SDI for 1.1% up to 93,316. If a business owner pays himself/herself a “reasonable salary”, the rest of the net income is not subject to these payroll taxes.

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Venture Capital Survey of the Silicon Valley in 2009 Third Quarter

Insight Michael Moradzadeh Michael Moradzadeh · November 16, 2009

Dow Jones VentureSource is one of the most popular nationwide venture capital date reports in the United States. VentureSources published its latest data on the development of venture capital investments in the third quarter of 2009. Below are some overviews observed by VentureSource.

  • With 616 venture deals and $5.1 billion invested, Q3 is a 6% drop over Q2;
  • IT investment barely outpaces health care;
  • Web2.0 investments surpassed the software sector for first time on record;
  • Medical device investments nearly match biopharmaceuticals;
  • Corporations investing instead of acquiring, commitments to VC-backed firms surpasses 2008 total;
  • $5 million median deal size on par with Q1&Q2, but still lowest since 1999.

It is undeniable that the investments and fundraising by venture capitalists remained at low levels in 3Q’2009, but there is room for optimism as the economy is picking up slowly and Nasdaq continued to improve. In addition, with regard to the largest U.S. deals overall in 3Q’2009, eight deals are conducted in California, such as Facebook, Tesla Motors, and Pacific Biosciences of California, etc.

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New Legal Trap for Employers in Hiring Independent Contractors

Insight Michael Moradzadeh Michael Moradzadeh · October 21, 2009

The United States Court of Appeals for the Second Circuit, in a September 10, 2009 ruling, held that an employer can be held liable for discriminatory hiring decisions made by its independent contractors. The case involved an independent contractor acting on behalf of the employer, telling the plaintiff that “they were looking for someone younger”.

The Second Circuit ruled that, even if the hiring decision is made by the authorized independent contractor, the employer was still responsible for the discriminatory hiring decision by the independent contractors. In a worse scenario, even if the independent contractor does not have the actual authority but the applicant thought that it did (“apparent authority” in legal terms), the employer is still liable.

Considering the harsh economy and fewer job opportunities these days, employers should be more cautious since the job applicant is more inclined to sue if he/she cannot get the job. Employers should avoid asking job applicant questions such as race, religion, national origin, gender and age, etc during the interview process; when entering into the independent contractor contract, it is a good idea to add an indemnification clause asking the independent contractor to indemnify the employer for any liability arising from the hiring process conducted by the independent contractor.

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Clean Tech Companies in Obama’s Administration

Insight Michael Moradzadeh Michael Moradzadeh · August 28, 2009

Clean Tech is generally considered to include multiple advanced technologies in four economic sectors: energy, waste, materials, and transportation. These technologies break down in categories such as energy generation and storage, water and wastewater, air and environment, etc. There is no clear-cut definition for a “Clean-Tech” Company, but as shown by its name, a clean-tech company should be a company equipping its core business with clean technology. As a related concept, Clean-tech Law contemplates a diverse set of legal issues related to the commercialization of clean technology, and the more traditional legal areas of clean technology law include intellectual property, patent law, licensing, litigation, and federal state legislative and regulatory issues.

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What is an S-Corporartion?

Insight Michael Moradzadeh Michael Moradzadeh · August 19, 2009

S-Corporations are corporations that elect to be treated as pass-through entities by the IRS. In order to qualify for S-Corporation status a corporation needs to satisfy several conditions, including the following: 1) all shareholders must be residents of the United States; 2) the corporation may only have one class of shareholders and may not have more than 75 shareholders; and 3) the company’s shareholders must be any of the following: individuals, estates, certain trusts, certain partnerships, tax-exempt charitable organizations, and other S corporations (but only if the other S corporation is the sole shareholder). This means S-Corporations may not be owned by other C-Corporations, LLCs, or foreign residents. If any of the requirements are not met at any time, the corporation automatically loses its S-Corporation status and will be treated as a a C-Corporation.

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What is a foreign filing?

Insight Michael Moradzadeh Michael Moradzadeh · August 19, 2009

Whenever a corporation or limited liability company does business (i.e. enters contracts or agreements) in a state other than the state in which they are domiciled, they are required to do a foreign filing in that state. For example, if a business is incorporated in Delaware, but has an office and/or employees based in California, that business needs to do a foreign filing in California. In such a situation the corporation will need to pay franchise taxes in both Delaware and California.

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Where should I form my entity?

Insight Michael Moradzadeh Michael Moradzadeh · August 19, 2009

This can be a very complex question. If you are looking to grow the company and get outside investment, then you should probably form an entity in Delaware. If your entity will have real estate holdings Nevada might also be a good option. Otherwise, it might make the most sense to simply form the entity in the state where you will be conducting most of your business.

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Non−competition Agreements

Insight Michael Moradzadeh Michael Moradzadeh · August 01, 2009

Can a part-time employee hold another job while working for you? Can he or she work for a direct competitor a year after he involuntarily leaves his employment? Does this change if he owns part of your business? What if the competitor is anywhere in the world instead of in the samecounty? Different states have different laws regarding the strictures that will be enforced once a worker leaves your company. These laws are affected by the stability of the economy. It is important for your company’s future and stability, that you take full advantage of whatever protections the applicable law affords.

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What is pass-through/flow-through taxation?

Insight Michael Moradzadeh Michael Moradzadeh · July 18, 2009

In a pass-through (or flow-through) entity, the entity’s income and expenses “pass through” the entity and are treated as the income and expenses of its owners. LLCs and S-Corporations are pass-through entities. This differs from a C-Corpoartion (which is the default form of corporation) which is taxed a corporate income tax at the end of the fiscal year in addition to the personal income taxes and dividend taxes that its owners and employees pay. Federal corporate income tax is about 15% to 35% of profits, and most states also have corporate income tax. This means after a C-Corporation has paid its expenses for the year, it will be taxed at least 15%-35% of whatever is left above the amount the company started with that year. If the company is an LLC or an S-Corporation, there is no corporate tax, and indeed the owners can even apply losses of the company against their personal income.

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Should my business be a Corporation or an LLC?

Insight Michael Moradzadeh Michael Moradzadeh · July 17, 2009

If your business only has a few investors and you do not anticipate receiving outside financing in the near future, an LLC is probably best for you because of its flexibility, simplicity, and pass-through taxation (see blog entry on pass-through taxation). However, if you want a board of directors that is distinct from the officers and/or shareholders of the company, or if you are looking for institutional investors, then a corporation is probably a better form of entity because of its more organized and established structure of governance.

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What is the difference between an LLC and a Corporation?

Insight Michael Moradzadeh Michael Moradzadeh · July 16, 2009

A corporation is made up of three groups of people – the shareholders, the board of directors and the officers, although the same person can hold multiple positions. The board of directors is formally elected by the shareholders and represents their interests. It is the board of directors that hires the officers of the company, also known as the management. The management’s job is to oversee the day-to-day operations of the company. Major decisions, however, require the approval of both the shareholders and the board of directors. A corporate structure is thus a highly organized and rigid structure of governance that can often be quite burdensome. A corporation requires a slew of corporate governance documents that must be frequently updated. It also requires that annual meetings be held for shareholders and the board of directors.

LLC stands for “limited liability company”. Generally it provides the same legal protections from personal liability as a corporation, however it is governed more like a partnership than a corporation. Whereas a corporation’s owners are called shareholders, the owners of an LLC are known as members. An LLC does not require a board of directors or even officers and can simply be managed directly by its members, if so desired. It can also be structured more like a corporation, with managers that are distinct from its owners. LLCs allow for significantly more flexibility than do corporations. For instance, the owners of an LLC can allocate distributions in whichever way they see fit. Even if the ownership of an LLC is split 60/40, the owners can decide to split the profits 50/50 – something that is not possible in a corporation without a significantly more complicated structure.

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Why form a limited liability entity (Corporation or LLC)?

Insight Michael Moradzadeh Michael Moradzadeh · July 15, 2009

A limited liability entity (a corporation or an LLC) provides both financial and liability benefits. The financial benefits include the ability to deduct more business expenses from annual revenue when calculating taxable income than would be possible without an entity. Forming a limited liability entity also helps protect your personal assets in the event of a lawsuit or from debtors in a situation where your business’s liabilities exceed its assets. This means that as the owner of limited liability company, your personal assets will not be placed at risk because of the actions of your company, as long as the company is kept separate from your personal assets. This requires the corporation or LLC to: 1) make sure the company is adequately capitalized (it has the money necessary to cover the reasonably predictable legal and business responsibilities of the business); 2) that the company keeps clean accounting books and has accounts that are separate from the personal accounts of its owners or employees; and 3) that all legal documents are adequately maintained and the company complies with corporate governance laws.

Also, forming a corporation or llc usually makes it easier for a business to borrow money and to sell all or parts of the business in the future. It is important to note that the longer a business operates without a legal entity, the more complicated and expensive it becomes to transform it into one. For this reason it is very important to form a legal entity as soon as feasible.

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