Experienced Business Law Attorney Says "The Social Network" Teaches Critical Lessons for Successful Business Negotiations

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Attorney John E. Cereso of Nevada Law Group Offers Tips to Avoid Being Shortchanged

According to experienced Business Law Attorney John E. Cereso of the Nevada Law Group, the 2010 Blockbuster , "The Social Network," a film about the invention of Facebook and the resulting lawsuits against Facebook Founder Mark Zuckerberg teaches critical lessons for successful business negotiations. Since business law can be a difficult subject to navigate without the proper tools, knowledge and agreements, it's important to have the proper protection.

"The Social Network" has been nominated for eight Academy Awards, including Best Picture (award ceremony being held February 27) and recently won the award for Best Motion Picture Drama and several other awards at the 68th Golden Globes Awards, making it the film with the most wins for the night.

"What happened in the movie is unfortunately what happens to so many people," said Cereso. "People who aren't knowledgeable about business negotiations and agreements are being taken advantage of, sometimes tricked and shortchanged in their attempt to gain fair treatment and compensation. When I watched the movie, it reminded me of many of my clients over the years; and I want to help others learn how to avoid the missteps the Winklevoss twins and Eduardo Saverin, the co-founder of Facebook famously paid for."

Below are some tips from Cereso on how to protect yourself in business negotiations:

  • Protect Your Ideas - Whether as an employee, consultant or partner, try to protect any of your ideas that are original and valuable. If you don't protect yourself, you may have them and their value taken from you. Always insist on using a "Non-Compete/Non-Disclosure" Agreement, and never sign anything without an attorney first reviewing it. The Winklevoss twins in the real-life Facebook story sure wish they had signed agreements for themselves.
  • Have Your Own Attorney - Don't assume the company attorney is your attorney as well. Attorneys representing both parties have a built in conflict of interest for several reasons: Every attorney is ethically required to look out for his/her client's interests and no one else's. Don't assume you're protected if you're not "feeding the horse's mouth." Facebook Co-Founder Eduardo Saverin was not careful in this way and his share of the company was diluted from thirty four percent to three hundredths of a percent.
  • Use "Relative Negotiating" Regarding Stock or Other Units of Ownership - When negotiating any form of company ownership, whether it be stock, stock options, restricted stock, partnerships, etc, remember that your interests can always be diluted and made far less valuable in any number of ways. Always ask for a commitment in writing, that your interests will be treated no less favorably than the founders and the new investors, if you are speaking about a new or young company, or all other employees or partners if you are dealing with an established company. Failure to use "relative negotiating" cost the real-life co-founder of Facebook $15 billion, maybe even more.
  • Beware of Non-Aligned Interests - Those people or companies who claim they want long-term relations, but who do no align interests are either unconcerned with the long-term relationship, don't intend a long-term relationship or are intent on taking advantage of you. Be aware of non-aligned interests and those who set up their relationships that way. They are rarely, if ever, to be trusted.

John E. Cereso, Esq. started Nevada Law Group in 2005. Nevada Law Group provides a broad range of legal services with an emphasis on family law, criminal defense, estate and probate law, business and franchise law, personal injury, bankruptcy and entertainment law. For more information about the firm, please visit http://www.nevadalawgroup.com or call (702) 946-8100.

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Renee Roberts