Emspire, LLC Announces Strategic Relationship with Technology Law Group

Emspire, LLC Announces Strategic Relationship 

with Technology Law Group

Emspiresm is a consulting firm focused on client’s organizational growth

Monday, February 1, 2021 — Emspiresm, a boutique marketing and management consulting firm with offices in Los Angeles, California and Washington, D.C.,  announced today a strategic relationship with Technology Law Group (TLG), a Washington, D.C. based law firm specializing in telecommunications and technology issues facing growing companies.  Through strategic interactions, TLG’s legal services will be available, on a referral basis and integrated with the marketing and management services provided by Emspire.

The Emspire management team, industry veterans Jay Rubin, Neil Ende and Salwa Scarpone, have spent their careers in the Telecommunications, Finance, Information Technology, Entertainment and Legal Services industries. Their goal is simple: to grow and enhance organizational value by applying new insights and approaches to foundational management, marketing, operational and legal matters. 

Neil Ende, Managing Partner of TLG and Emspire commented, “I believe that Emspire’s ability to provide its clients with access to the legal services provided by TLG at highly-attractive and exclusive rates, compliments the unique, comprehensive and integrated package of services available to Emspire’s clients.  I look forward to building TLG’s relationship with Emspire’s clients in the coming years.”    

Emspire is poised to bring a new level of comprehensive and integrated services to its clients, guided by its three core principles: integrity, intellect and ingenuity. Emspire’s direct and personal approach will ensure that every client has the tools it needs to meet its fullest potential.

For more information regarding Emspire and their offerings, the team can be reached at their Los Angeles location (310) 961-9019, their Washington, D.C. office (202) 963-0333 or by emailing info@emspire.com. You can also visit their website: http://emspire.com.

About Emspire

Emspire’s core mission and value proposition is to empower and inspire organizational growth by providing practical expert advice and cultivating trusted relationships. Emspire’s Managing Partners Jay Rubin, Neil Ende and Salwa Scarpone have spent their careers working in the Telecommunications, Finance, Information Technology, Entertainment and Legal Services industries. Our goal is simple: to grow and enhance organizational value by applying new insights and approaches to foundational management, marketing, operational and legal matters. We “emspire” small and medium businesses in a truly collaborative manner.

The three spires of Emspire’s logo reflect the essence of our credo: Integrity, Intellect and Ingenuity. This credo reflects who we are, what we believe and it anchors every  aspect of every client interaction. Our prime objective is to assist your organization to grow to its fullest potential. Email info@emspire.com to schedule a call with our team.

About Technology Law Group

Technology Law Group specializes in transactional, litigation, regulatory and intellectual property (trademarks and copyright) issues faced by distributors, agents and other growing telecommunications and technology companies. We have decades of experience successfully representing these companies in all aspects of their business operations. We are recognized industry-wide for our expertise and for our ability to apply creative approaches to complex business and legal issues that enable our clients consistently to obtain extraordinary results in the agreement process and, as necessary, in the courtroom. If you are not getting timely personal service on fair terms from people who really understand the telecommunications and technology industries, who will protect you through proper agreements and who will vigorously and successfully assert and defend your rights before government agencies and the courts, you should get to know us.

Press Contact:

Salwa Scarpone

Managing Partner, Emspire

salwa.scarpone@emspire.com

310-961-9019

Your Organizational Culture is the Cornerstone to Long Prosperity

There are many philosophical perspectives on life and the pursuit of happiness, but one thing that is as sure as the day is long is the fact that your company’s culture is directly tied to its organizational morale and its prosperity.  Simply stated: A safe environment creating a secure, stable and well managed team will engender a profitable bottom line.

Today’s landscape of mergers, acquisitions, health scares, stock market crashes and general uncertainty has begun a new evolution of imprinting on our psyches. An overlay of fear has begun to set in to those who cannot see past the fact that opportunity abounds for the individual that does not buy into the fear-based tactics employed by the media and governmental institutions. It is up to us as employers, managers and visionaries to create organizations that become that safe haven, the port in the storm that allows people to feel safe and thereby empowered by the source of their livelihood. 

When we feel safe we allow ourselves to accept our situational surroundings. When acceptance is reached the shields are lowered actual enjoyment blossoms. Enjoyment is the seed for enthusiasm that ultimately germinates prosperity.

We spoke in the last installment of “connection” and that the feeling of belonging quells the anomie that leads to individual and organizational depression, that being a “truth” that we will refer back to from time to time, we can make the not so quantum leap that a culture that practices the enrollment of people as more than cogs in the machine to be “handled” by the Human Resource Team is one that develops in to that safe space that allows for personal and professional growth.

A team dynamic that is truly open to a bi-directional communication paradigm with its members and exhibits a non-possessive behavior toward an individual’s actual “work to life balance” invites stimulated conversation in all veins and is one that propagates ingenuity and loyalty. 

Facilitating a balance is the key to creating culture. I believe we learned it all in Kindergarten when we were taught the Golden Rule: “Do unto others as you would have them do unto you.” That being said, as managers we have an obligation to step back and look at any situation through the lenses of our subordinate as not a task, or issue to be handled, but as a person with who has needs that fall somewhere on Abraham Maslow’s hierarchical pyramid of needs.

Allow Katherine to go to her daughter’s High School swim meet on Tuesday afternoon without the concerns that she’s not going to get her work done, or even worse, that she is getting away with something. She will be so grateful that not only will the work get done, but her other tasks will reap the benefits of the new found love that came as a result as the humanistic approach to Katherine’s needs as a mother. It is simply a fact that the needs of the individual will ultimately outweigh that of the company if unattended to, so why not merge the two and create a space that allows for both in symbiosis?

Please do not mistake “Loyalty” for a life-long guarantee that a humanistic culture will create a staff of “lifers”, but what it will do is increase the happiness coefficient of your team for their collective tenure which will be prolonged and reimbursed in the form of new life blood recruiting. 

Here’s where you get to think outside the box: I humbly suggest to you to do everything in your power to not only grow your employees for their longevity with you, but to allow them to freely move on to another organization when their ability for fulfilment can no longer be met by your stewardship. Their fulfillment is by their design and humbly entrusted to you to nurture with the same benevolence your culture was created. Again, by design it will become a self-fulling ecosystem of prosperity.  

Written by: Jay Rubin, Managing Partner at Emspire

Management is an Art, Not a Science

As leaders we would all like to think that there is a magic formula to managing people and herding cats… my friends in the sake of honesty and full disclosure there just is not a wand you can wave, potion you can drink or a spell you can cast to accomplish this most important goal. It’s all back to the concept of connection. Connection with the team member on a root level that creates trust and builds a bond that seals the deal.

Now you are sitting back with your cup of coffee saying, “well that’s not going to be hard, I’m a likable person so why would this be difficult?” I am not saying it’s difficult if you are open to listening and accepting people for who they really are at their core. So, the challenge, if you want to call it that, is to position yourself as not a threat, an actual ally in the grander scheme of things, and please make note here: It only works if you are sincere.

Managing from your heart is the key, the true anchor point of all of your humanistic endeavors as a leader. People sense when they are being lied to, and if they don’t, you may have to ask yourself are you a really good liar? Or is this person just not a good fit for your organization? Either way here you need to step back and assess the situation both for your own internal well being and that of your team because being a liar will not work for anyone’s higher purpose and someone without the radar to detect that negativity may be a fish out of water as well.

All that said, step back and look at your team, acknowledge the beauty of its diversity and then you can really start to take on the task of management through connection. Look at every employee of yours as a person with needs and external motivation via an affirmation that comes from working for, and with you. Ask yourself what must I do? What must this organization do to create not just safety, but intrinsic motivation for the team member?

Your salespeople may externally appear to be motivated in a coin operated fashion, but is that really all there is? You may think your operations people may need the grounding of programs like a 401K with matching and your product, finance research and development crews are all looking for tuition reimbursement and internal educational programs… but I’m telling you that all of that may be true on one level, but when you get past the stereotypes you are going to be amazed what you find motivates people – here’s the rub, you have to truly care enough to find out by spending the time to learn through engagement. The true challenge here is you have to be open and vulnerable to share yourself to make the connection. 

Please look around your organization and decide where to start the connection process today. I can tell you one thing for sure, when you start it will take on an energy of its own until your organization becomes a “Family” … and a family has trust in itself and they will bust their tails to turn goals into the reality that becomes long term prosperity.

Written by: Jay Rubin, Managing Partner at Emspire

Effectively Negotiating Telecom Agreements*

* Emspire is not a law firm and Mr. Ende’s Insights cannot be considered to be legal advice.  

Legal advice can be obtained from Mr. Ende in his capacity as Managing Partner of Technology Law Group.

Carrier agreements are intended to set forth the terms and conditions under which resellers purchase the essential commodity of their business:  telecommunications services.  Sadly, however, it is the rare instance when resellers have read or truly understand the essential terms and conditions of their agreements or negotiate the terms of their agreements effectively as a matter of tactic or strategy.  Even more troubling is the fact that few resellers use their agreements to facilitate their business interests and to protect themselves against undue risk.  As a result, rather than being a roadmap to success and a shield against risk, carrier agreements often become minefields through which resellers unwittingly wander until the inevitable misstep is made and the damage is done.

The white paper is the first in a series addressing key issues in telecom agreements.  Future white papers will address the process of drafting telecom agreements (including a discussion of some of the most critical terms) as well as agreement implementation, dispute resolution and litigation issues.  We hope that you find them of value.

The Value of “Showing Up”

There is much truth in the saying that “showing up is half the battle.”  With respect to the negotiation of telecom agreements we would argue both that “showing up” is well more than half the battle and, regrettably, that resellers and agents rarely “show up” in a capable manner.

We firmly believe that there is substantial value in the process of negotiating telecom agreements even if it does not result in terms and conditions that meet all your substantive objectives in the negotiation process.  If you show up prepared and make it clear that you take your agreements seriously, it sends a signal to the carrier that you expect no less from them.  Indeed, we have found that the process of negotiating, standing alone, has very substantial benefits—both in terms of the client’s understanding of the risks and rewards it faces and in terms of its understand of its specific obligations under the agreement—even if the ultimate document does contain all the terms that it seeks.  

A properly managed negotiation process will serve you well, both in the negotiation stage and in future interactions.  Indeed, while we litigate many carrier agreements, we rarely litigate ones in which we have been involved in the drafting process, both because those agreements are generally more balanced, but also because the carrier understands that the client has both the interest and ability to enforce its rights.  

Understand The Risks and Rewards of Your Agreement

Agreements are, first and foremost, allocations of obligation and risk.  The first step in negotiating an agreement, therefore, must be to take the time to understand the obligations each party is and/or should be undertaking, the risks associated with those obligations and in the agreement as a whole.

This process is  best understood by example.  Many telecom agreements include minimum take commitments (generally taking the form of a monthly or annual Minimum Revenue Commitment), which are theoretically justified on the basis of preferential pricing.  For the supplier, the risk being addressed is that the customer will not purchase a sufficient quantity of service to allow the supplier to cover its costs and make its desired return.  This is a legitimate concern.  However, the manner in which most of these provisions are drafted, and associated with other terms of the agreement, often shifts more of the risk to the customer than can possibly be justified by the actual risk the supplier is undertaking.  

Indeed, because these provisions generally require the customer to pay the full cost of service, even if no service is provided, they can result in a substantial windfall to the supplier.  The opportunity to achieve this substantial windfall can create an incentive for the supplier to establish conditions (or to allow conditions to arise) under which the customer is more likely to default on this obligation.  These conditions include changes in the rates applicable to the service, terms and conditions of service, provisioning practices and/or quality of service—all of which are entirely beyond the customers control—but which can make it difficult or impossible to sell the service and to meet the commitment.  Yet, it is the rare agreement that places any meaningful limitations or parameters on the supplier’s ability to make unilateral changes in these essential terms or, more importantly, that the agreement associates the customer’s obligation to meet its commitment, in any way, to the supplier’s conduct.

Needless to say, terms of this nature create a materially unbalanced risk reward scenario for customers.  Yet, we are endlessly astonished that virtually all agreements contain these types of naked MRC provisions in favor of suppliers without imposing any corresponding obligations on them.  

The above scenario is but one of many found in telecom agreements where the risks and rewards are totally out of balance.  We will address numerous others in upcoming white papers, For the purposes of the negotiation process, however, the good news is that each of these scenarios can be identified through the application of proper expertise and scrutiny and there are numerous alternative terms and conditions that can be drafted into the agreement to establish a more proper balance of risk.  

Establish Realistic Objectives

In addition to understanding the risks and rewards that you face, it is also critical to establish realistic objectives as to which terms and conditions which are truly essential to your business plan.  For example, if your business plan is such that your customer base may be unstable, thus raising significant concerns   with an MRC, then your negotiating objective must be either to have the MRC removed or, if that is not possible, to offer a viable alternative.  In offering an alternative, it is essential that it addresses the supplier’s rationale for insisting on the term, even if you believe it to be a false rationale.  For example, in the MRC circumstance, if it cannot be removed in its entirety terms can be added limiting the scope of the MRC to the term of the underlying carrier agreement, reducing the amount of the payment to an amount which reflects the supplier’s cost, controlling the circumstances in which it is applied and/or establishing a ladders rate scheme.  The key is to craft alternative approaches which address both the claimed rationale and your business need.  Experienced businessmen, working with experienced and creative telecom counsel, can generally craft such provisions to meet any scenario that arises.

Don’t Sell Yourself Short

The corollary to the axiom that “showing up is half the battle” is that you need to show up with conviction.  Much of the negotiation game is won and lost in the dynamics of the process.  A key element of these dynamics is the conviction that you bring and the manner in which that conviction is presented.  If you give up before you start, you appear to be willing to give up, or you show up unprepared or without adequate conviction, you will most certainly lose.

This reality is dramatically clear in the manner in which many carriers commence the “negotiation” process.  How many times have you heard from a carrier that contract terms are “not negotiable”, or that their attorneys do not allow any changes in the language of the agreement?  These are negotiation tactics, pure and simple.  Do not be deterred.  If you are bringing valuable business to a carrier, they have a substantial economic incentive to work with you.  Indeed, contrary to the mythology encouraged by carriers, we have found, in our decades of negotiating telecom agreements, that negotiation is generally possible and that most carriers will, in fact, make changes in their agreements to incorporate properly crafted terms.  

Be Patient

The negotiation process can be a war of attrition.  Carriers rely on the fact that their customers will simply cave in if the process becomes extended or difficult and that they do not have the staying power required to achieve a fair result.  Do not fall into this trap.  Even if you have limited resources and a limited time horizon, it is essential that you never reveal this fact and that you structure the negotiation process in a way that maximizes the chance for an outcome that meets your time and budgetary requirements.  It can be done.

* * *

Agreements are the foundation of your business and a well implemented negotiation strategy is the cornerstone of that foundation.  While it never is possible to eliminate all risk, it is possible to understand where that risk lies, to limit its scope and effect and to structure your business operations to reduce the likelihood that a risk causing event will occur.

Written by: Neil Ende, Managing Partner at Emspire

* Emspire is not a law firm and Mr. Ende’s Insights cannot be considered to be legal advice.  

Legal advice can be obtained from Mr. Ende in his capacity as Managing Partner of Technology Law Group.

Five Ways Agents Can Trap Value *

* Emspire is not a law firm and Mr. Ende’s Insights cannot be considered to be legal advice.  

Legal advice can be obtained from Mr. Ende in his capacity as Managing Partner of Technology Law Group.

Unlike most business relationships, where the party with the direct relationship controls the customer, telecom agents do not have this luxury. To the contrary, because the role of a telecom agent typically is limited to acquiring customers for the carrier, an agent generally does not have any proprietary interest in the customer or control over the customer relationship. 

An agent’s rights are purely derivative and only exist to the extent granted in the agent agreement. And, because agent agreements often limit the time period in which commission payments are paid to the term of the agreement itself, an agent may forego long-term commission income even when the carrier’s relationship with the customer, and the income flowing from that relationship, continues well beyond that term. 

Even worse, many agent agreements contain restrictive non-compete terms that prevent the agent from communicating with, let alone seeking to sell other services to these customers both during and for years beyond the term of the agreement. The combination of strict limitations on commission payments to the term of the agreement and aggressive non-compete terms can wall off an agent from the opportunity to derive a long-term revenue stream and/or obtain the full value of its customer base. 

However, there are a number of business and legal tools that can be employed to enhance the opportunities for agents to maximize their opportunity to greatly enhance these revenues and value. 

1. Evergreen Clause 

Evergreen clauses are the most common mechanism used to extend the period in which an agent obtains commission payments. Although these clauses come in various forms, as a general matter, they provide that commission payments will continue to be made on revenues obtained from customers brought in by an agent following the expiration or termination of the agent agreement. 

In considering an evergreen clause, it is essential to be vigilant not only that the words of the clause itself accurately set forth the agreed upon terms but also that the intended effect of the clause is not jeopardized by other provisions of the agreement. Thus, for example, it is critical that the clause specifically provide that, while an event of termination may permit the carrier to refuse to take on new customers from the agent, it does not void the obligation to pay commissions under the evergreen clause on revenues derived from existing customers. The evergreen clause also should carefully define the period in which commission payments will continue to be made, address the obligation to pay commissions on additional and/or new services ordered by the customer following termination as well as the impact of the expiration of any term commitment and/or renewal of the underlying customer agreement. 

If written correctly, and contained in a properly crafted overall agreement, evergreen clauses can increase substantially the period in which commission payments are received and thus the value of the customer base both in the near and long terms. 

2. Profit Sharing Arrangements 

Profit-sharing arrangements are the distant cousins of commission-based compensation arrangements. The advantage of profit-sharing arrangements can be the right to profits is generally not restricted to the term of the agent agreement and an allocation of a percentage of the profit can be substantially more lucrative than a percentage commission payment. 

Unfortunately, like commission arrangements that are based on “net revenues,” the calculation amount of the “profit” to be “shared” can be a difficult exercise. Indeed, while gross revenues generally can be established directly from the carrier’s accounts receivable records, “profit” can be based on a number of cost and operational factors, including varying methods of determining and allocating cost and overhead that are hard to define and can be manipulated to limit the revenues classified as “profit.” 

Moreover, profit-based arrangements are subject to the risk that services are provided at a “profit.” Thus, while a “profit-sharing” model can offer the prospect of longer term and greater revenue flows, the difficulties of calculation and proof along with the risk of manipulation and that a profit will not be achieved, cast doubt on the value of these arrangements. Further, to the extent that these arrangements normally do not include a right of ownership, the agent also does not share in the value of the customer base itself or any increase in that value at the time of sale. 

3. Equity Arrangements 

Equity arrangements allow the agent to obtain an ownership interest in the entity providing service to its customers. Thus, equity arrangements, unlike any of the above payment methodologies, do allow the agent to share directly in the value of the customer base itself and in any increase in that value at the time of sale. 

These advantages, however, come with a number of practical challenges. First and foremost is the need to establish an initial value for the customer base and a mechanism for adjusting that value over time and as the customer number and mix changes. Associated with this process is the need to establish the equity share to be allocated to the agent initially and over time. 

In terms of recurring revenues to the agent, equity arrangements also can suffer from the cost allocation and “profit” issues described above, particularly where the carrier is using the same staff and other resources to run numerous different equity- based arrangements. Moreover, to the extent the agent is not likely to be the controlling shareholder, great care is required to assure the agent’s rights are properly protected. 

Thus, while equity arrangements do offer the opportunity for the agent to participate directly in the appreciation of the asset it has brought to the enterprise, careful thought is required to balance the long-term benefits of ownership against the risks and uncertainties associated with achievement and calculation of profit and with the agent’s status as a minority equity holder. 

4. Buyback Arrangements 

Buyback arrangements can be an attractive hybrid of a standard commission arrangement and an equity arrangement. These arrangements generally give the agent the right to buy back some or all of its client base from the carrier either at a predetermined price or at a price that will be determined at the time of sale based on a set of agreed criteria. The potential value of these arrangements is that they provide the agent with the ability to obtain an ownership interest in its client base, thereby taking part in the long-term appreciation of the asset it has brought to the carrier. As with any arrangement of this nature, the actual value to the agent will depend on the specific circumstances in which the buyback can occur, the valuation/discount model that will be applied and the associated rights, terms and conditions. 

Properly structured, buyback arrangements can offer an added measure of flexibility to the agent’s business operations and exit strategy as well as a real opportunity for the agent to participate in the long-term appreciation of its customer base and to continue to derive revenue long after the end of the original agency agreement. 

5. Sale of Commission Stream 

In contrast to the above, if your desire is to have the right to exit from your agency arrangement through the sale of the commission revenue stream, it is generally not problematic but will depend in part on the assignment provision in the agreement. Most agent agreements contain “assignment” clauses setting forth each party’s authority to assign its rights and/or obligations to others. These clauses take various forms: sometimes they flatly prohibit one or both parties from assigning any right or obligation without the prior express written consent of the other; sometimes they allow such assignments with prior consent of some kind; and sometimes assignment is allowed without limitation. Thus, absent an absolute prohibition on assignment, it is generally possible to realize the market value of your customer base by selling to a credible third party for either a one- time or recurring payment over time. 

The playwright, Oscar Wilde once said that “[I]t is better to have a permanent income than to be fascinating.” With thought and attention you can take real steps toward obtaining “permanent income” from your agent agreements; becoming “fascinating” may be a bit more challenging. 

Written by: Neil Ende, Managing Partner at Emspire

* Emspire is not a law firm and Mr. Ende’s Insights cannot be considered to be legal advice.  

Legal advice can be obtained from Mr. Ende in his capacity as Managing Partner of Technology Law Group.