This is an exciting time for attorneys around the US – laws are changing, long-awaited decisions on cases are being made, courts are upgrading their procedures, and some of the largest mergers of all time are happening in 2022. This week’s Practus news covers 5 of these exciting legal topics people are talking about this year.
1. Major mergers affecting corporate law – Microsoft & Activision
This year started off with Microsoft’s largest acquisition in the company’s history – the $69 billion purchase of Activision Blizzard Inc. This is a major gaming and software acquisition for Microsoft with Call of Duty, World of Warcraft, Overwatch, and Hearthstone as just some games in the Activision Blizzard portfolio. With this gaming portfolio, Microsoft would become the 3rd largest gaming company in the world.
This purchase is one of many major mergers and acquisitions we’ve seen over the last few years. Many of which have found themselves under scrutiny from US Antitrust enforcers. The FTC and DOJ are seeking to amend the current merger guidelines, which aren’t up to speed with the boom of digital mergers. With higher scrutiny and potential changes in antitrust enforcement, major companies should be working closely with legal counsel to assess the risks of a merger or acquisition.
2. Out-of-state remote workers post unique legal issues to employers
Remote work is here to stay, largely due to employee preference shown by 77% of employees saying they’re more productive in a remote environment. As employees continue to work remotely, they also continue to travel and explore new workplaces. The rise of digital nomads comes with the rise of complicated state and local tax implications for employers.
Let’s say an Oklahoma business hired a remote employee based out of Oklahoma. At the time of hiring, the employee does indeed live and work out of Oklahoma. But this remote job gives them the freedom to work from anywhere, so they embrace it and start traveling the country while working remotely.
The employee may be happier and more productive with this opportunity, but it could open up an employer to additional state and local taxes as well as potential licensing issues (depending on the profession). If your “Oklahoma” employee is working out of the state, it’s critical the employer knows where they’re spending their time and how to remain compliant with local laws.
3. Innovation in the court system is here to stay
The court system has been through its ups and downs over the last couple of years. It started as postponing appearances when the pandemic first hit and hesitantly transitioned to fully virtual appearances and e-filing. Hybrid versions of hearings have become pretty commonplace as well.
Now that we’re 2 years into this digital transformation, it’s time to embrace the virtual court system rather than push back against it. The good news? Courts are finally catching up on their dockets, and this could lead to a more efficient judicial system that matches today’s digital world. The hard part? There will need to be updated Rules for Video Conferencing to truly make a digital transformation in the court. Some things to consider: muting your mic, wired internet, logging on early to work through the tech issues, data security, and access to technology.
4. Commercial real estate is getting a much-needed increase in diversity
Previous studies showed that 92% of senior-level real estate jobs are held by white men and women (78% men; 14% women), highlighting the lack of diversity in the field. This study was one of the reasons cited for new investments into minority-owned real estate developments.
The recent surge of public and private funding in these minority-owned projects is to increase representation of historically excluded groups, create more opportunities for generational wealth, and develop culturally diverse businesses where diversity is severely lacking.
In the legal field, funding opportunities like Philadelphia’s Minority Developer Program can help foster large real estate transactions that otherwise wouldn’t have taken place. New areas of development, new perspectives, new provisions in contracts, and renewed hope in bridging the large gap in diversity in this field seem like they’re all headed in the right direction.
5. Digital assets are triggering tax code changes across the world
The Internal Revenue Code is a complex piece of literature, typically only read by accountants and lawyers. It’s not exactly a page turner, and most people are happy to have never seen a printed copy. However, it may be time for an IRC upgrade, or at least additional guidelines, as digital assets are clearly here to stay.
Cryptocurrencies, NFTs, IP, and other digital assets are now such a big part of our global economy that countries are looking closely at upgrading their tax codes. And it makes sense why authorities want to – there is an estimated $2 trillion of cryptocurrency and $3 trillion of alternative digital assets out in the world, most of which is untaxed.
The question remains, “Is cryptocurrency an asset or a legal tender?” Tax authorities tend to argue they are a digital asset, not a legal tender. While banks and individuals would prefer them to be legal tender, thus avoiding taxation. The IRS characterizes cryptocurrencies as digital assets, but that’s inconsistent with other countries around the world. This inconsistency along with complications arising from determining the taxable event cause both authorities and individuals confusion when it comes to proper compliance with tax codes around the world.
The US, Australia, and the UK have started to release guidelines on taxation of digital assets, which is a good indicator many other countries will follow suit if they haven’t already. Whether or not they’ll be consistent in their treatment of digital assets is a topic for a later date.
At Practus, we’re proud to have attorneys practicing in each of these 5 exciting fields so we can stay up to date on the latest developments. It seems this year will continue the rise of innovation in the legal field – something we look forward to as we continue to grow our virtual law firm. If these are the types of legal issues you want to be involved with in your practice, or if you are interested in joining our growing team of attorneys, please reach out to Stephanie.Recupero@practus.com or visit us at practus.com to learn more.