Isolation as a Strategy in Mediation

Almost every mediation has both joint sessions attended by all principals and counsel as well as separate breakout sessions for single-party conferences. The joint session is intended to bring the parties together for a full exploration of claims and defenses to a dispute. In addition, a principal who feels unheard can speak out directly to another principal or principal?s counsel. A joint session also presents the opportunity for counsel to speak directly to an opposing principal about an intended trial strategy, the expense of litigation or any issue counsel believes the principal may not fully comprehend. Open communications between the parties and counsel facilitate the flow of information and may foster a conciliatory relationship, which can be helpful in reaching dispute resolution and possibly even a future business relationship.

Isolation as a Strategy in Mediation

Almost every mediation has both joint sessions attended by all principals and counsel as well as separate breakout sessions for single-party conferences. The joint session is intended to bring the parties together for a full exploration of claims and defenses to a dispute. In addition, a principal who feels unheard can speak out directly to another principal or principal?s counsel. A joint session also presents the opportunity for counsel to speak directly to an opposing principal about an intended trial strategy, the expense of litigation or any issue counsel believes the principal may not fully comprehend. Open communications between the parties and counsel facilitate the flow of information and may foster a conciliatory relationship, which can be helpful in reaching dispute resolution and possibly even a future business relationship.

Isolation as a Strategy in Mediation

Almost every mediation has both joint sessions attended by all principals and counsel as well as separate breakout sessions for single-party conferences. The joint session is intended to bring the parties together for a full exploration of claims and defenses to a dispute. In addition, a principal who feels unheard can speak out directly to another principal or principal?s counsel. A joint session also presents the opportunity for counsel to speak directly to an opposing principal about an intended trial strategy, the expense of litigation or any issue counsel believes the principal may not fully comprehend. Open communications between the parties and counsel facilitate the flow of information and may foster a conciliatory relationship, which can be helpful in reaching dispute resolution and possibly even a future business relationship.

Isolation as a Strategy in Mediation

Almost every mediation has both joint sessions attended by all principals and counsel as well as separate breakout sessions for single-party conferences. The joint session is intended to bring the parties together for a full exploration of claims and defenses to a dispute. In addition, a principal who feels unheard can speak out directly to another principal or principal?s counsel. A joint session also presents the opportunity for counsel to speak directly to an opposing principal about an intended trial strategy, the expense of litigation or any issue counsel believes the principal may not fully comprehend. Open communications between the parties and counsel facilitate the flow of information and may foster a conciliatory relationship, which can be helpful in reaching dispute resolution and possibly even a future business relationship.

Concern Over Japan’s Growth Strategy

HONG KONG — Nearly a year after the Japanese began to hope that their economy could turn around under new leadership, a sense of realism is replacing the euphoria.

Economists and investors have grasped just how difficult it will be for Prime Minister Shinzo Abe to sustain the growth of the last few months. Nowhere is that sentiment more evident than the Japanese stock market. The Nikkei 225 index is now nearly 40 percent above where it started the year, but the gains during the last four months have been slight — just 3.4 percent.

The economic recovery Mr. Abe engineered during the last year has been remarkable given the decades Japan in which languished. Buoyed by a big pickup in public works spending and a Bank of Japan policy of flooding the economy with low-interest money, growth has accelerated markedly. Deflation, the country’s biggest economic problem, seems to have disappeared.

The Japanese central bank said on Thursday that it now expected the economy to expand 1.5 percent in the year starting next April, up from a previous forecast of 1.3 percent.

The yen, whose persistent strength weighed on Japan’s important export sector for years, has fallen, making Japanese goods more competitive. That has helped corporate earnings recover, too.

For many ordinary Japanese and small businesses, however, the benefits so far are less tangible. “There is no Abenomics effect at all here,” Wakana Otake, the owner of a shop that sells ties in the Ginza shopping district of Tokyo, said Thursday. “We heard luxury items sell well in department stores and so on,” but her shop had seen no benefit so far, she said. “It’s actually worse than last year, and last year was worse than the previous year.”

Economists say some of the hardest work remains. Japan’s leaders still have not taken on the far-reaching structural changes to make the country’s businesses more competitive. The economists worry that without reform, Japan could slide back into the deflation mode that had dogged it for more than a decade.

Nicknamed the “third arrow” of Mr. Abe’s economic policy, these include efforts to make the labor market more flexible, improve productivity in the service sector and bring more women into the work force. Under a growth strategy laid out in June, Mr. Abe also set the goal of creating special economic zones that would relax some regulation and attract foreign investors.

Many of the plans laid out in June, however, lack detail and risk being watered down, analysts said. Similarly, plans to lower corporate taxes — a move seen as crucial to bolstering Japan’s competitiveness and encouraging more foreign companies to bring operations to the country — will not be completed until December.

“There is a sense that the series of strong announcements earlier has been replaced by mere holding statements,” said Gary Dugan, chief investment officer for Asia and the Middle East for the wealth management company Coutts.

The third arrow of the recovery plans seems to be “veering off target,” he said. “We have scaled back our optimism on Japanese equities until there are clearer signs that measures to help the economy are being brought back on track.”

Izumi Devalier, Japan economist at HSBC, said, “The third arrow has not even been fired yet.” She said, “Investors were hoping for really game-changing chances. But that’s not how politics works in Japan. You need to build a consensus between cabinet and the bureaucracy.”

The likelihood now, she said, is that “there is not going to be a lot of progress on the third arrow in the next few months.” Another problem is that the economic improvement of the last year has yet to directly affect many of Japan’s households. Although the job market is tight and unemployment is low, companies have so far largely resisted making large investments or raising salaries.

Government data released on Thursday underlined this point. Workers’ total earnings edged up just 0.1 percent in September, compared with a year earlier, and summer bonus payments, an important indicator of whether companies are willing to pay more, rose just 0.3 percent.

Consumer prices rose 0.7 percent in September, compared with a year earlier. That means real wages actually fell, Masamichi Adachi, an economist at JPMorgan in Tokyo, said in a research note. “While there is anecdotal information that labor shortages are pushing up the wages of certain types of workers” including construction-related workers and part-timers, he wrote, “average wages remained weak.”

And even though the wages of large companies are likely to increase in the next fiscal year along with profits, “it looks difficult to see a material rise in the average wages of all workers in the near future.”

Eric Pfanner and Makiko Inoue contributed reporting from Tokyo.

Isolation as a Strategy in Mediation

Almost every mediation has both joint sessions attended by all principals and counsel as well as separate breakout sessions for single-party conferences. The joint session is intended to bring the parties together for a full exploration of claims and defenses to a dispute. In addition, a principal who feels unheard can speak out directly to another principal or principal?s counsel. A joint session also presents the opportunity for counsel to speak directly to an opposing principal about an intended trial strategy, the expense of litigation or any issue counsel believes the principal may not fully comprehend. Open communications between the parties and counsel facilitate the flow of information and may foster a conciliatory relationship, which can be helpful in reaching dispute resolution and possibly even a future business relationship.

Off the Charts: Predictions on Fed Strategy That Did Not Come to Pass

While the first such program started at the height of the credit crisis in 2008, the new program came when the economy was growing, and it was subjected to immediate and withering criticism, particularly from conservatives fearful it would set off inflation and unimpressed by the Fed’s belief that action was needed to spur job growth.

A group of 43 economists, including former aides to Republican presidents and presidential candidates, published an open letter to the Fed’s chairman, Ben Bernanke, saying the program should be “reconsidered and discontinued.” The planned bond purchases “risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment,” the economists wrote.

The Fed did not back down, and Republican efforts to pass legislation removing the Fed’s mandate to seek full employment were not successful. The next year, the Fed moved on to what became known as Q.E.3, also known as Operation Twist, an effort to bring down long-term interest rates by purchasing longer-term Treasuries. That move was criticized by Republican leaders even before it was announced. “We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy,” the Congressional leadership said in a letter sent to Mr. Bernanke while the Fed was meeting.

Now, the Fed is again under attack, as officials discuss the possibility of slowing the pace of bond purchases later this year, and of possibly ending the program as early as 2014. That talk has caused interest rates to rise and led to warnings of large losses for bond investors, amid complaints that it is still too early to proclaim that the recovery has gathered strength.

Losses for bond holders are sure to happen at some point, assuming interest rates return to more normal levels, and this week’s downward revision of first-quarter economic growth may provide a warning that the Fed’s growth expectations, which are more robust than those of many economists, may be too rosy. Navigating an end to quantitative easing, whenever that becomes necessary, may yet prove to be tricky.

But as the accompanying charts indicate, the Fed’s critics of 2010 and 2011 have not proved to be prescient. Far from bringing disaster, Q.E.2 appears to have helped the economy.

It is remarkable how close many markets are now to where they were when the Fed announced the program on Nov. 3, 2010. The recent rise in 10-year Treasury bond rates has left the yield just a little lower than when the program began. The price of gold spiked to record highs in 2011 but is now down about 8 percent from its pre-Q.E.2 level.

In 2010, there were complaints from developing countries that the Fed was trying to drive down the value of the dollar, something Fed officials denied while conceding that the program could temporarily have that effect. Now the dollar index — based on the value of the American currency against six foreign currencies — has recovered all the lost ground.

Inflation has been quiet, and perhaps more important from a central bank perspective, inflationary expectations remain subdued. Such expectations can be inferred by comparing yields of inflation-protected Treasury securities to ordinary Treasuries of the same maturity. The chart shows what the markets expect inflation will be in five years.

For a time last year, the markets were expecting deflation — a far cry from the runaway inflation feared by Fed critics in 2010. Now, the expectation is for inflation of a little over 1 percent — or less than the expectation when the Q.E.2 program was begun.

The decline in unemployment since the Fed began Q.E.2 has been steady but hardly inspiring, and there are still fewer people working than there were before the credit crisis began in 2008. But consumer confidence has been rising recently and the stock market, despite some recent Fed-induced jitters, remains more than 30 percent above its level when the program began.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Wealth Matters: Taxes Influence Investment Strategy, and Not Always for the Better

That may not be a good thing for their portfolios.

“Clients are definitely asking, because it’s a real issue in today’s environment,” Michael N. Bapis, a managing director and partner with the Bapis Group at HighTower Advisors, said. “We try to keep them focused on the goals — preserving what they have, capturing some of the upside, limiting the downside. At the end of the day, we can’t change the tax laws.”

When asked about how tax rates would affect an investment, he said his advice was almost always the same. “If it doesn’t make sense for your portfolio, then it doesn’t make sense,” he said, even if there is tax savings. “If it does make sense, regardless of the tax consequences, we’re going to put it in your portfolio.”

Last week, I looked at how the changes to the tax code were affecting how people thought about their estate plan. This week, I’m looking at how tax increases can influence people’s investing behavior.

The tax rates on investments have increased significantly from last year. Depending on a person’s income, taxes on long-term capital gains and dividends are now as high as 23.8 percent, an increase of 59 percent over last year’s rate. Taxes on investments that are held for less than a year that incur short-term capital gains tax or investments subject to income tax rates have increased for top earners by 24 percent, to 43.4 percent (with the Medicare surtax included) from 35 percent.

Those are substantial increases, but focusing on them alone can obscure a fuller analysis of risk. Investors can end up paying no taxes on an investment, but that may be because they lost money on it, or they may pay lots of taxes on a large gain that they might not have achieved otherwise. This is why advisers stress that taxes should not be the first concern when deciding whether to buy — or not buy — an investment.

If there is one investment that has been promoted as great for minimizing taxes and achieving a large gain, it is master limited partnerships. Most are involved in the transportation or storage of oil and natural gas. What makes them appealing, from a tax perspective, is that a large portion of the dividend they pay is treated as a return of principal and is not taxed.

But in the rush for one type of tax savings, investors can end up paying other taxes. Master limited partnerships with pipelines that run through several states can incur state tax bills for investors, though usually only when the income goes above a certain threshold.

The bigger tax concern generally comes when investors sell their partnerships, since the part of the dividend that was not taxed for years reduces the original price of the investment. Greg Reid, a managing director at Salient Partners and chief executive of the firm’s $18 billion master limited partnership business, said an investor who bought a partnership and sold it five to 10 years later could be faced with two types of taxes. The first is income tax, because the original purchase price would have been reduced by the amount of principal returned in the dividends. The second is capital gains tax on the increase in the value of the investment itself.

Another way to look at these partnerships is to consider the solid and increasing dividends they have paid over the last 25 years, often 6 to 7 percent.

“The baby boomers are going to need a lot of income to live,” Mr. Reid said. “M.L.P.’s are particularly great for older people who are retiring. They have a growing income stream.”

As for avoiding high taxes, the solution is to give the partnership to charity or die with it in your estate. Both may be viable options for investors in their 70s and 80s but are probably less attractive to people in their 30s.

Municipal bonds, which have long been attractive to wealthier investors because the interest they pay is not taxed by the federal government, pose a different sort of risk.

Mr. Bapis said he was concerned that investors who were not paying attention to the broader economic news were not aware of the current risks of buying an existing municipal bond. With yields on many municipal bonds extremely low — around 0.75 percent for five-year bonds and 1.74 percent for 10-year bonds, according to Bloomberg — even a small increase in their price, which would cause the yield to go down, would cause a loss of principal.

With Houston Opening, Reed Smith Forgoes Typical Expansion Strategy

After years of trying to find a merger partner to help it launch in Houston, Reed Smith decided it didn't want to wait any longer and instead moved to open an office from scratch.

Germany Holds Talks on National Energy Strategy

Until now, each state has drawn up and worked from its own plan for the expansion of renewable resources in its territory, often in conflict with one another. On the federal side, there is no single leader for the project to increase reliance on renewable energy to at least 35 percent by 2020. Instead, responsibilities are divided between the ministries of the environment and the economy, with the education minister responsible for financing research on renewable energy and storage technology.

The opposition Social Democratic Party has pounced on the weakness in the Merkel government’s signature project ahead of national elections next year, while widespread public support for the plan faces strains from a nearly 50 percent jump in a consumer tax for the transformation next year.

“Germany’s energy transformation is threatened with collapse due to the inability of the government” to draw up a master plan, Hubertus Heil, a leading Social Democrat, said before Friday’s meeting.

Germans’ relationship to nuclear energy is deeply emotional, rooted in the antinuclear protest culture of the 1970s and memories of radioactive mushrooms and wild game in Bavarian forests that resulted from the 1986 meltdown in Chernobyl.

It would be a severe blow to Ms. Merkel and her Christian Democrats if the project, passed last year by her center-right government in the wake of the Fukushima nuclear disaster in Japan, were to fail. On Friday, she pledged to work with the states through a national dialogue on how best to move forward.

“Germans can be assured that we feel committed to the goal of energy transformation,” Ms. Merkel said after the meeting. “I felt a spirit that we all want, and perhaps can, achieve this.”

Torsten Albig, a Social Democrat who is governor of Schleswig-Holstein, also praised the discussions as “a considerable step forward” toward reaching a master plan by March.

His northern coastal state, along with Lower Saxony, has been criticized for expanding offshore wind energy at such a rapid pace that turbines have had to be switched off on exceptionally windy days, because they produce more energy than the grid can handle.

Ultimately, Ms. Merkel would like to see the energy generated by wind farms in the north transmitted to the power-hungry industrial south. A plan to expand Germany’s grid with that aim, which would require about 500 miles of new power lines and other major upgrades, is to go before Parliament next month.

DealBook: Wilson Sonsini Retools Strategy to Land Internet Start-Ups

Peter DaSilva for The New York TimesYoichiro Taku, left, and Todd Carpenter of the Wilson Sonsini law firm, which opened an office for start-ups in San Francisco’s SoMa neighborhood.

SAN FRANCISCO — The ground floor of 139 Townsend Street has all the markings of a start-up: exposed lighting, long communal tables and an odd assortment of knickknacks, including a fire-engine-red British telephone booth.

But the brick industrial building, in San Francisco’s SoMa district, is not the home of Twitter, Zynga or another up-and-coming Internet company. It’s the office of Wilson Sonsini Goodrich & Rosati, the half-century-old law firm.

“There’s a marketing benefit,” said Yoichiro Taku, a partner at Wilson Sonsini who represents many early-stage companies. “It definitely makes us hipper.”

Wilson Sonsini’s new outpost reflects the firm’s evolving mind-set as lawyers jockey for the attention of start-ups. In an effort to build credibility among new technology companies, Wilson Sonsini and others are employing a broad set of tools, including offering free services, cozying up to incubators and writing blogs.

Such efforts are critical. While early-stage ventures represent just 20 percent of the firm’s business, those companies can generate hefty fees as they mature. Wilson Sonsini and other firms also make small investments in young start-ups, which can pay off in later years.

“Small deals would not have interested these firms a few years ago,” said Joseph A. Grundfest, a Stanford law professor. “Now, it’s the new normal.”

For years, Wilson Sonsini dominated Silicon Valley, shepherding young technology companies like Apple, Netscape Communications and even the ill-fated Webvan. In 1998, Lawrence W. Sonsini, the firm’s patriarch, introduced two Stanford graduate students to Sequoia Capital and Kleiner Perkins Caufield & Byers, two top venture capital firms. Six years later, Wilson Sonsini helped their company, Google, go public.

Today, the firm plays in an increasingly crowded space. In the 1960s when it was first founded, only a handful of law firms had offices in the region. Now scores blanket the Bay Area.

“We were left alone in this market for an absurdly long period of time in the ’80s and ’90s,” said Steven E. Bochner, a partner at Wilson Sonsini. “Everyone is here now.”

According to Dow Jones VentureSource, the firm represented the most venture capital deals in the first half of this year, with 157 transactions, nearly double its closest competitor. But its once-absolute grip on the market has slackened.

In the last wave of Internet initial public offerings, the law firm picked up LinkedIn’s prized sale, as well as those of Splunk and Palo Alto Networks. But it did not land Zynga, Groupon or, most significantly, Facebook, which went to its rival, Fenwick & West.

While no one at Wilson Sonsini is exclusively focused on start-ups, a few lawyers have emerged as leaders in this area. Mr. Taku, 44, a native of Japan who joined the firm 16 years ago, has helped broker partnerships with several incubators like AngelPad and Founder Institute, which help Wilson Sonsini get a first peek at fledgling start-ups. And he runs startupcompanylawyer.com, a personal Web site where he muses on topics like incorporation and financing. Mr. Taku often collaborates with Todd Carpenter, who helped lead the effort to open the SoMa office. And Mr. Sonsini still tries to meet with one or two start-ups a week.

For big law firms, courting young companies is something of a balancing act. On the one hand, a firm wants to reach the highest number of top-shelf start-ups. But it has limited resources, so it has to be choosy.

To that end, many have taken steps to reduce the cost of early-stage venture financing for entrepreneurs, while automating the process to make it easier for lawyers. Fenwick & West has been at the forefront of this trend. Two years ago, the law firm created and posted standardized deal documents online for free downloading.

Earlier this month, Wilson Sonsini teamed up with Angelist, a network for investors and entrepreneurs, to also offer free standardized deal documents online. Although start-ups can use any law firm to process the forms, Wilson Sonsini has offered to do it pro bono if a start-up becomes a client.

“We’re trying to show we can add value to the community.” said Mr. Carpenter, who worked on the Angelist project with Mr. Taku and Mr. Bochner. “So hopefully, when these start-ups need a lawyer, they think of us.”

Jack Smith, a recent London transplant and co-founder of Vungle, a video advertising platform, met Mr. Taku through AngelPad. Mr. Taku offered to defer legal costs up to $5,000. Mr. Smith, who had read Mr. Taku’s blog, was sold. He was also able to wring out additional hours with Mr. Taku, known as Yokum, who often holds free office hours at AngelPad.

“Yokum was kind of a celebrity for us,” he said. Months later, the start-up remains a client, but it now has to adjust to a more normal fee structure. “They are charging us more — you quickly learn what you can bother your lawyer with.”

The initiatives aim to be founder-friendly. In August, Mr. Taku worked with Adeo Ressi, the founder of the Founder Institute, to create a financing alternative to convertible debt, which has been popular among entrepreneurs but can burden start-ups with debt. Mr. Taku and Mr. Ressi came up with standardized convertible equity documents. Convertible equity solves some of the problems of debt financing by eliminating the interest rate and the need for repayment.

Like the Angelist program, those documents are available free online. The initiative set off lively debate, prompting blog posts from several influential venture capitalists, including Fred Wilson of Union Square Ventures and Mark Suster, a partner at GRP Partners.

Several of Wilson Sonsini’s competitors said they were skeptical that these broad efforts would amount to much. Indeed, some initiatives have been expensive ones.

Earlier this year the firm signed a five-year lease on the SoMa locale, shorthand for the neighborhood South of Market Street, a mile away from the company’s flagship San Francisco office. While four partners work out of the SoMa office, it’s also intended to be an open, collaborative space that can be used by start-ups and entrepreneurial organizations.

On a recent Tuesday, the office was co-hosting a pitch event for 30 new start-ups, a chance for companies to present their products to potential investors and win entrance to a coming technology conference.

Although the event was organized by DEMO, a technology conference business, Wilson Sonsini provided free pizza and Trumer Pils, a popular beer brewed in nearby Berkeley. At other times, the firm has held seminars on hiring, employee liquidity events like an I.P.O., and data privacy, which featured regulators from the Federal Trade Commission.

“Being a mile away can be a huge difference,” said Mr. Carpenter.