Doug Cornelius .com

In browsing through the schedule for the upcoming Enterprise 2.0 Conference, I thought it would be easier to schedule my days using a calendar. So I put the events I am attending (and presenting) onto a public Google calendar: Doug Cornelius at Enterprise 2.0.

The calendar is embedded below. Those of you who followed by Household KM posts will remember my affection for Google Calendars [Calendars and Household Knowledge Management].

The February 2008 edition of The Business Lawyer contains a report on Model Real Estate Development Operating Agreement with Commentary [pdf. ABA membership logon required].

The model agreement was put together by a Joint Task Force of Committee on LLCs, Partnerships and Unincorporated Entities and the Committee on Taxation, ABA Section of Business Law.

Here is the fact pattern that the model agreement addresses:

The Project. The real estate project involves the acquisition of undeveloped land and the construction of an ice skating rink complex with a hotel, retail shops, condominiums, and an office building.

The Venturers. The proposed venturers are: (1) a real estate development and management company (the “Developer”), whose focus is to organize the venture, acquire the land, obtain appropriate permits, oversee construction of all the buildings in phases, manage all of the buildings, and hire the appropriate leasing agents and ancillary specialists necessary for the project; (2) the owner of the undeveloped land (the “Land”) upon which the project is to be constructed (the “Landowner”); and (3) an investor who will provide the necessary equity financing for the venture to obtain the needed debt financing for the construction and subsequent operation of the project (the “Financial Investor”).

The Entity. The venture (the “Company”) is to be organized as a manager-managed limited liability company under the Delaware Limited Liability Company Act (Del. Code Ann. tit. 18 §§ 101 et seq.) as in effect on August 1, 2007.

Debt Financing. While in many (if not most) cases, the construction financing will require guaranties or other forms of credit enhancement, it is assumed, for simplicity sake, that the construction loan, the permanent refinancing loan, and the operating capital line-of-credit will not require any credit enhancement and, therefore, will be treated as “nonrecourse debt” under applicable federal income tax regulations.

The Ownership/Membership Interests. The contributed capital will consist of the Land contributed by the Landowner (which is assumed to have a fair market value of $5,000,000 and an adjusted tax basis at the time that it is deeded to the Company of $1,000,000) and the cash contributed by the Financial Investor (which is assumed to be $10,000,000). The Developer does not contribute any capital to the Company. The Landowner and the Financial Investor are entitled to receive a preferred return on their contributed capital. Any residual profits will be shared 40% to the Developer, 20% to the Landowner, and 40% to the Financial Investor. These percentages were selected for mathematical convenience. The amount of the Developer’s “carried” or “promoted” interest and the amount of the investors’ preferred return (if any) will need to be discussed and agreed upon by the parties.

Tax Treatment of the Company. The Company is to be treated as a partnership for federal tax purposes as provided under Treas. Reg. § 301.7701-3(b)(i). For that reason, in many parts of the operating agreement and the commentary, the Company is referred to as a “partnership” and the members are referred to as “partners.” See, for example, the rules of construction in Section 11.8(b).

Cash Flow. In addition to the Developer’s carried or promoted interest, the Developer likely will be entitled to certain fees (e.g., development and management fees). Those fees, and the services to be provided in exchange for those fees, often are contained in other contracts between the Company and the Developer. Those fees will be paid “other than in the Developer’s capacity as a member” of the Company within the meaning of Code § 707(a) and, therefore, are not to be treated as “distributions” by the Company. Distributions of available cash after the Company has serviced its debt obligations and paid or made provision for its other liabilities are to be made to the members first, in the amount of their presumed aggregate, net income tax liabilities on their shares of the Company’s net income; second, in the amount of any remaining accrued, but unpaid, preferred return (i.e., net of applicable tax distributions) on their contributed capital; and the balance, in proportion to the members’ residual profits percentages (adjusted for any applicable tax distributions that they previously received on those profits). An exception to the foregoing distribution regime is made or proceeds received from the sale or refinancing of the Company’s property. Under hose circumstances, the members’ contributed capital is to be repaid before the remaining sale or refinancing proceeds are distributed in accordance with the members’ residual profits percentages.

Allocations. Capital accounts will be maintained in accordance with applicable Treasury Regulations. Allocations of the Company’s income, gains, losses, and deductions are to be made in a manner that allows all distributions to be made as described in the preceding paragraph while complying with applicable Treasury Regulations.

I will put up some future thoughts on the model agreement. My initial reaction is that I am not used to running into a situation where there are three parties. Usually, there is the Financial Investor and the Developer. The Landowner throws a different curve into the agreement.

Today’s Boston Globe has a Page One article on US district Court Judge Nancy Gertner and her blogging activities: Off the Bench, Judge Blogs Her Mind.

To those of you who read Robert Ambrogi’s Law Sites, you have already heard this story about Slate.com’s Convictions Blog. I was surprised to see the Globe put it on the front page.

[Gertner, whom President Clinton nominated to the bench in 1993, has long written on legal matters in law journals and newspaper op-ed pages.

For the past nine years, she has also taught two courses on sentencing, one a semester, at Yale Law School, her alma mater, where she shares her insights in her characteristically chatty manner. So blogging, she says, is not a radical departure.

"I saw this as the new media version of what I've always been doing," the former criminal defense lawyer said recently at her office at the John Joseph Moakley Courthouse. "If this is where people are getting information, this is where we have to be."]

Judge Gertner has written four posts so far. She joins Judge Richard Posner, Judge on United States Seventh Circuit Court of Appeals as a blogging federal judge. Judge Posner blogs on The Becker-Posner Blog.

Is anyone else aware of other judges who blog?

The schedule of programs for the Enterprise 2.0 Conference in Boston is finalized.

If you take a look at Tuesday at 2:15 you will see that I am on the panel: What Blogging Brings to Business. Jessica Lipnack is moderating the panel consisting of me, Bill Ives, Patti Anklam and Caesar Brea.

There are some great keynote sessions, including these two:

Enterprise 2.0 – A State of the Industry Address
Join Carl Frappaolo and Dan Keldsen of AIIM Market Intelligence, as they provide highlights on the first in-depth Enterprise 2.0 market study, including the results of a survey completed by over 400 Enterprise 2.0 users and evaluators.

Enterprise 2.0 Reality Check

Simon Revell, Manager of Enterprise 2.0 Technology Development, Pfizer Ltd

As readers, you realize that I am an avid consumer and tester of social media and new communication tools. An article in the MIT Sloan Management Review helped put the testing of these tools into focus for me: The Six Key Dimensions of Understanding Media. JoAnne Yates, Wanda J. Orlikowski and Anne Jackson propose a guide to understanding and evaluating the use of communication technologies in the workplace.

They propose the “Genre Model” which identifies elements of adoption and the change in patterns of communication as a tool for evaluating new technology. The model consists of six elements:

• Why – what is the purpose and expectation
• What – what content will be communicated
• Who – participants in the communication and their roles
• Where – location of the communication, physical or virtual, geographic dispersion
• When – temporal elements, like how quickly do you expect a response
• How – manner and form of communication, such as format and structure

The article traces some history and analysis from the business letter, to the paper memo to email. Then it moves on to a case study of Blog Central in IBM, Skype in MNI Partners, and an Electronic Bulletin Board in a large European Petroleum Company. It uses the six elements to for the initial expectation of each new communication tool and the actual use of each tool.

The method of the article is an interesting way to approach new social media platforms both externally and internally.

The panel started off with the David Spade Blackberry Intervention video.

Everyone agreed that we have attorneys like this who need an intervention. But is it a technology problem or a business process problem?

The emphasis is on records management of which email management is a part. One panelists played an internal video showing the dangers of not having good records management for physical records or electronic records.

One firm had a 90 day email retention problem. The email needs to be filed into the email repository within 90 days or it gets deleted. The key is to have the business policy of email retention and then have the technology enforce the policy. Archiving email just defers the problem. They started by deleting emails more than 2 years old, then one year old and then tighter and tighter. The panelist created a legacy email library in iManage. The library is only available to records and not to attorneys. Just in case there was a legitimate need to pull back one of those emails. Those emails are then subject to a ten year retention. They uses Out IM from DocAuto to move the email. The key to success was treating it as a business problem, not as a technology problem. The risk management focus was the strongest selling point.

The other panelist is stuck with the firm not being able to come up with a document retention policy. Then the email overload is a technology problem. They had migrated from a Lotus Notes to an Exchange/Outlook environment. One person had 90,000 messages in his Notes inbox and another with a 20GB inbox in Notes. Those crushed Exchange and Outlook. The push was to move emails out of the inbox and into client/matter folders. Those folders are intended to be a precursor to an email management process. The email system was a de facto document management system. His attorneys also wanted to have all their emails available when portable.

One battle that both panelists had is the push back from attorneys and management that “disk space is cheap!”

One panelist automatically archived email that was over 90 old. They also archived any email over a certain size limit. The archiving allowed them to manage the mailbox size and deal with the technology problems. He found that the firm disclaimers and 230 circular disclaimers ended up taking up a lot of space. He also noticed that the flow of emails is still increasing.

One issue that both panelists mentioned was not just the file size, but the item count in the main outlook boxes. Outlook has a problem when there is more than 5,000 items in a top level folder. The calendar is a particular problem. [I am a diligent filer and got caught with having too many items in my calendar.]

The panel then addressed the benefits to the attorneys. One reason is to make it easier to find the email. The huge inboxes cause slow performance and increases the likelihood to bring the system down. An audience member brought up the collaboration benefit of sharing email. It seems you need a carrot and stick to get email filing. Some will respond to the fear and some will respond to the benefits.

These are my notes from a panel on enterprise search. One panelist pointed out that enterprise search may be reaching too far. They will not be able to get every silo. You should just try to get most of the silos.

The first question was “make it like Google.” The first response was to have a simple interface that delivered relevant results. Relevancy is the hardest part. We do not have the magic special sauce that makes PageRank work so well for Google. One panelist also said that people are looking for Amazon.com. They want an ability to manipulate the search results to filter down to useful content. Another panelist showed the importance of putting the filters on the left-hand side. People are so use to Google putting advertisements on the right-hand side that they ignored the filters if they were on the right.

One issue is how to deliver relevancy or whether to include relevancy. What are the keys to relevancy.

What about the relationship between the document management system and the enterprise search? Most of the knowledge lives in the document management system and email. One panelist pointed out that those two sources are largely limited to work product.

What a bout taxonomy? Knowledge management has been focused on taxonomy. Does enterprise search reduce the need for a taxonomy? The panel all felt that taxonomy was very important to make enterprise search work. [I disagree. You want metadata to filter results. You do not necessarily need a rigid taxonomy.]

There was a lot of discussion about enterprise search inadvertently revealing documents that should not be public. One firm mentioned that they shut the enterprise search down after the a few weeks to give a cooling down period. During the cooling down period, people could put security on documents. Previously they had “security by obscurity.” One firm had a policy to report information that is available through the search that should be secure. Another firm did not include administrative documents as part of the initial roll-out of the enterprise search.

The panel thought that any enterprise search is better than no enterprise search. They do produce different results and have some different capabilities. But they all seem to produce much better results than not having one. Some notes are focusing on multi-threading. You do not want people to have to wait in line for their search to run. Another point to focus on the index size. Some indexes are almost as big as the underlying content repositories.

What to include in the enterprise search? The panel responded:

• Lotus Notes, resume collections, CRM, intranet, KM methodology system
• Lotus Notes, Elite billing information, CRM, records, DMS, website

Each of the panelists each had the results tabbed out and not intermingling the results in a federated list. People mostly deferred to the default tab of the search results.

There was some challenge to the request for “The Google.” Several audience members think the results need more bells and whistles to work. [I struggle with the question of whether the search tool needs to be more complicated or whether we need to store the information in a better way that simplifies the search.]

How do you prove value of enterprise search? One answer is that is an infrastructure thing, more than an ROI thing.

The panel offered their top advice on choosing and implementing and enterprise search tool:

• Define the sources to search
• Focus on security recognition
• Understand who is searching for what, in what business context
• Tune-ability of the tool
• Focus on crafting the user interface
• Put it into the toolbar of other applications; bring the ability to search to them

Michael Idinopulos, the Vice President of Professional Services at Social Text presented on “Where is Web 2.0 in the Enterprise?” for the afternoon session at the Legal IT Leadership Summit. Michael is also the author of the Transparent Office.

Michael helped bring McKipedia to McKinsey. It was an internal wiki to help organize information. He found that there were many wikis already being used in the organization. They were using for project management and similar projects. At the same time as launching McKipedia, he also launched “collaboration spaces” on the side. There was no structure, no sponsorship and no notification across the organization. At first McKipedia was very popular, but died down. Collaboration spaces took off.

Internal wikipedia is not the killer use case. People do not want to edit an encyclopedia. In-the-flow works better than above-the-flow. The tools work better when they are employed to help someone do their daily task, not as an extra job responsibility. Culture is not a prerequisite; it is a journey. You can start in ways that are less about change and less foreign to people.

Michael challenged traditional knowledge management as asking people to capture information outside of their daily job. Traditional knowledge management requires you to take extra steps to do things for the benefit of the firm.

Good enterprise collaboration tools should be part of the daily work. We want to introduce tools that make it easier for the individuals to do their jobs better and more efficiently.

The tools require the mindset of “ask for forgiveness” not “ask for permission.”

One collaboration tool has sales representatives email questions to a wiki and then all responses come back to the wiki. [Maybe it would be good to remove all distribution lists from email. You have to go to a web page to email a group. The email message and responses would also be stored in a webpage as a discussion forum.]

There is no need to create a new culture. The 2.0 tools can be used to improve the existing interactions within a single business unit to achieve operational improvement. Then you can expand this create new interactions within the business unit to achieve business innovation. You can expand it across multiple business unit

Collaboration requires a purpose. Why do you have a wiki? Is it to easier share information is to communicate within a team.

You should learn by doing. It is cheap and easy to experiment. You should focus on smaller groups rather than the enterprise as a whole. Focus on empowering the particular office, or practice or team. You should focus on smaller groups to allow them to work in a way that works for them. But you do want to think globally and get the tools to share a common platform. (obviously Michael thinks SocialText offers a great platform.)

This morning’s keynote session is “Serving Multiple Generations – The Role of Web 2.0 and Strategies for IT.” Andrew McAfee is the presenter with myself and Jason Lichter as co-panelists. The session is planned to be released in a wiki later this month.

Andy got into this space three or four years ago when he first heard about web 2.o. At first he was skeptical. He finds companies are very innovative and that they are even better at talking about how innovative they are.

Andy was going watch wikipedia and see it an example of the implosion of the web 2.0 movement. Much to his surprise, it did not. I fact, he found the entries to be incredibly useful and informative. His next thought was how this could useful inside an organization as opposed to the world-wide web.

His definition: “Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.” This is not an incremental change, these are novel technologies and approaches. They offer more than incremental improvement in areas of innovation, collaboration, knowledge sharing, collective intelligence, search and discovery.

There are a few underlying trends that are key to the nature of the change. Social software is new way to look at these. There is the network effects and Metcalfe’s Law. There are free and easy platforms for communication. There is a lack of up-front structure. There are mechanisms that exist to let structures to emerge, so you can find the information you are looking for.

He distinguished between channel technologies and platforms. Email is a channel communication. It is point to point, invisible to others and cant’ be consulted or harvested. Websites are a type of platform; it is universal, visible and consult-able. The problem with the platforms is that you need to know technology and have security rights. Now there are free and easy platforms that remove the expertise and cost associated with the website.

Andy told the story of Wikipedia and Nupedia. He then moved on to del.icio.us and showed us his del.icio.us tags. He compared the del.icio.us tags to the taxonomy of the early days of Yahoo. He pointed out the del.icio.us tag page that shows the most popular tags and which you share.

In talking about clusters and tags it highlighted the powers of the next version of Universal Search and Vivisimo’s semantic clustering.

Andy moved onto the business benefits of Enterprise 2.0. He focused on his Enterprise 2.0 Bullseye. He moved on to the story of the cost savings at Intrawest based in internal blogs: Intranet case study: Intrawest Placemaking.

He moved on to adoption challenges. The biggest is overweighting the advantages of the incumbent and the under-weighting the new. Something new needs to be ten times better for people to shift to the new. Dion Hinchcliffe mentioned this on his Introduction to Social Computing at the 2007 Enterprise 2.0 conference.