Rush on Business : Iowa Corporate Lawyer & Attorney : Rush Nigut of Brick Gentry Law Firm : Serving Des Moines, Cedar Rapids, Davenport, & Sioux City

One of the biggest challenges for my clients is hiring and retaining talented employees.  David Maister has an excellent post on hiring talented people.  In his post David expands on the War for Talent is Back by Bob Sutton of Harvard Business Online.

Thanks to Kevin O'Keefe for pointing out the posts.  Kevin runs an ever-expanding law blog development and Internet marketing business called LexBlog.  His blog is definitely one I check out every day.

One of the more interesting takes from these posts is the feeling that superstars are overrated.  I am not sure I necessarily agree.  What is overrated is a superstar that has a hard time working within your company's system.  But what if your superstar gets along with others, isn't too greedy and fits just right in your company's system?  Also, from a start-up perspective having a great business system is necessary but having the "right" people first is the recipe for success.  If you don't have the "right" people can you ever develop the great system?  As Jim Collins says, "First Who, Then What".

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Be sure to catch Des Moines, Iowa patent attorney Brett Trout's blog this week as he takes center stage among law blogs by hosting Blawg Review.

As pointed out by the editor at Blawg Review, Brett's blog is worth reading often and adding to your blogrolls and feed readers if you have not already done so.  It is flat out one of the best law blogs in the blogosphere. 

Trout's Blawg Review #106 is now available here.

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If you are looking for Venture Capital blogs look no further than Applied Disruption's "One Stop List of VC Blogs".

It is a very interesting collection of blogs.  In some cases not quite what I expected. 

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For those Iowa-Microsoft class action case junkies you can view the settlement agreement here.

I have received several emails on how to file a claim in the case.  For details on how to file a claim be sure to go to www.IowaMicrosoftCase.com.

There is a Frequently Asked Questions section to help you with your filing. 

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The Virginia Tech tradegy continues to raise awareness of the growing necessity to prevent workplace violence.  Shanti Atkins of the Harassment Training Blog outlines a Seven-Step Workplace Prevention Plan for employers.  Those steps include:

1. Develop a Management Team to develop, review and implement policies regarding workplace violence;
2. Implement an Education and Training Program;
3. Increase Security Measures;
4. Develop a Response Procedure;
5. Use Judicial Resources;
6. Prescreening and Consistent Enforcement of Workplace Policies;
7. Establish Clear Communication Channels.

Perhaps the best advice from the blog post is to take threats of violence seriously.  Shanti says that you should not assume that an employee is just venting or blowing off steam.  Employers should take steps to investigate complaints promptly and take disciplinary action if warranted.  Reporting employees should also be assured they will not be retaliated against for making such complaints.   

It is all too easy to believe that it will not happen to you.  Some employers may not even have a policy concerning workplace violence.  Employers would do well to develop such a policy and re-examine those procedures on a yearly basis.

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Rush on Business Podcast No. 5 is an interview with Mike Colwell.  Mike is the Executive Director of the Business Innovation Zone of Central Iowa (BIZ).  BIZ is a new regional business accelerator through the Greater Des Moines Partnership.  If you are an entrepreneur in Central Iowa you won't want to miss this podcast.

I encourage you to listen to the podcast to learn how BIZ is uniquely situated to help entrepreneurs in Central Iowa. BIZ will offer low cost mentoring and counseling to businesses of all varieties including advance manufacturing, bio and life sciences and high technology.  Mike's focus is on businesses that may have the potential to grow on a regional or national level.  To achieve this goal Mike will take entrepreneurs through a five-step process:

1. Determining the Strategic Fit and Connecting with the Market.
2. Business Planning.
3. What talent is necessary to start-up and grow?
4. What are the leadership needs?
5. Finding Capital.

Mike also has some very interesting things to say about the Iowa business environment and the qualities that define an entrepreneur. 

If you want to reach Mike Colwell to find out more about BIZ please email him at mcolwell@desmoinesmetro.com or give him a call at 515-286-4915.

Listen to the podcast for free!

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Tomorrow I have a podcast interview with Mike Colwell on my BlogTalkRadio channel page.  Mike is the Executive Director of the Des Moines Partnership's new business accelerator, BIZ.  The live interview is scheduled for 4:00 p.m. and will be also be available in podcast format on this blog.

Hope you will listen.  If you want to call in to ask a question the number is (646) 652-4878.  Mike has some exciting things to share about how BIZ can help build businesses in Des Moines and Central Iowa.

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Judge Rosenberg gave preliminary approval today of a $179.95 million dollar settlement in the Iowa consumer class action against Microsoft.  Unlike other settlements across the country, Microsoft has agreed to pay cash to consumers as opposed to vouchers for future purchases of software.  As I predicted, the settlement is substantial and actually in line with a previous Minnesota settlement from a dollar standpoint.

According to reports, class members are entitled to receive $16 for each copy of Windows or MS-DOS they purchased; $25 for each copy of Microsoft Excel; $29 for each copy of Microsoft Office; and $10 for each copy of Microsoft Word, Works and Home Essential software. Consumers do not need proof of purchase to be reimbursed for up to $200.

Microsoft will provide one-half of the difference between $179.95 million and the unclaimed cash and vouchers to Iowa public schools in the form of vouchers that may be used by the schools to purchase a broad range of hardware products, Microsoft and non-Microsoft software, and professional development services.

There will likely be an uproar over the amount requested by the Plaintiffs' lawyers. Over $75 million in attorney fees and expenses!  Microsoft indicated in court today that it objects to the amount of attorney fees requested.  The judge will ultimately decide how much is awarded.

For details on how to receive your payment please go to www.iowamicrosoftcase.com.  The hearing on final approval of the settlement is currently scheduled for August 31, 2007.

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Brett Trout had an interesting post today on the Top Ten Technologies for the Non-Tech Lawyer.  In my humble opinion the number one opportunity for the non-tech lawyer is reading feeds.  The amount of information available today with nearly one click of the mouse is incredible.

Why should lawyers care?  This post illustrates why.

Give feed reading a try!

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Stephen R. Hampton, Executive Officer of Wage Payment and Minimum Wage for the Iowa Division of Labor offered up the following to explain the changes to Iowa's new minimum wage law in the April 2007 edition of the Iowa Lawyer.  The law took effect April 1, 2007.

• It increased the minimum wage from $5.15 per hour to $6.20 per hour as of April 1, 2007.  That wage rate will go up to $7.25 per hour as of January 1, 2008.
• It generally applies to all employers who gross at least $300,000 in sales or business per year.  In addition, the law applies to some types of employers regardless of business volume, such as government agencies, schools, day care centers, pre-schools, hospitals, and those in construction, laundry, and dry cleaning.  There are some employers who are not required to comply with the law, such as many types of agriculture-related employers, certain summer camps, and others.
• It also changes the "initial employment wage" that employers may pay a new hire the first 90 calendar days of employment.  As of April 1, an Iowa employer is allowed to pay an "initial employment wage" of $5.30 per hour during this 90-calendar-day period.  That "initial employment wage" will increase to $6.35 per hour as of January 1, 2008.
• Commencing April 1, tipped employees, those who "customarily and regularly", receive more than $30 per month in tips, must be paid at least $3.72 per hour.  This amount will increase to $4.35 per hour on January 1, 2008.  If the wage paid and tips received do not average at least minimum wage for all hours worked, the employer is required to pay the difference.
• Iowa employers will be required to put up a new poster reflecting the new minimum wage.

More information on the new Iowa minimum wage law and a free copy of the poster is currently available under the Announcements column on the Iowa Workforce Development Web site.  If you have specific questions regarding the minimum wage laws please consult your employment lawyer.

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Filewrapper.com is the latest Iowa law blog to hit the blogosphere by the Des Moines law firm of McKee, Voorhees and Sease.  The blog will focus on intellectual property law including patents, trademarks, copyrights, trade secrets and other related issues.

Several representatives from MVS attended our Lawpportunities blawg seminar last November.  I am glad to see them online and I wish them success.  Stay tuned because Iowa patent attorney Brett Trout and I are planning another blawg seminar soon.  We hope to have a world renowned law blogger join us if the dates work out.  If you are an Iowa lawyer you will not want to miss it!

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A regular reader asked whether I was going to write my annual baseball post.  Well, he is in luck and I can actually mix in a little law with it.

If you love baseball and e-commerce law (don't we all?) you will want to check out Blawg Review #103 from Jonathan Frieden of E-Commerce Law.  Jonathan includes Des Moines, Iowa patent attorney Brett Trout of Blawg IT in his designated hitter portion of the review.  (There is no way Jonathan could have known that Brett can't swing a bat to save his life but fortunately Brett knows his way when it comes to Internet Jurisdiction).

Thanks to Eric Turkewitz of the New York Personal Injury Law Blog for reminding me of the E-Commerce blawg review.  Eric has a kind statement regarding my recent comments on Kevin O'Keefe's blog about Chubb Insurance's changing position on providing legal malpractice coverage for blogging lawyers.  Looks like Eric is also a baseball fan as he attended the opening day at Shea Stadium.

And while we are on the topic of baseball Indianola native Casey Blake is off to a respectable start with the Indians.  Last year, Casey had a torrid start to the season.  Casey has historically played his best ball after April and May so it looks like another good season could be in the works. (I must add that Casey kindly donated an autographed jersey this past year to the Rooftop Foundation for its annual golf outing.  Thanks again Casey).

Finally, the Pee Wee and Rookie Cardinals of the Raccoon Valley Little League get started this weekend (weather permitting).  You never know there may be a future major leaguer among them.  Dreams do come true.  Casey is a perfect example.  Moreover, who would have dreamed Iowan and Drake University grad Zach Johnson would win the Masters?  If that doesn't inspire you nothing will. 

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If you are looking at a franchise opportunity you should read this article from Barry Kurtz on Digging into Franchises:  The Due Diligence Minefield.  His proposed Legal Due Diligence Checklist within the article is a must read. 

The due diligence process is important when buying a franchise (or any business).  Kurtz's article deals more with buying the entire franchise company but the article is helpful even if you are buying a single franchise.  I also have multiple articles addressing due diligence issues when buying a franchise including:

• Do Your Homework When Selecting a Franchise;
• Buying a Franchise:  Questions to Ask Franchisors;
• Considering a Franchise:  Make Sure to Interview Current Franchisees.

Joe Cooney and I have a podcast on Buying a Franchise Basics which also has some helpful hints on franchise due diligence.  Joe has some great insight so I recommend a listen. 

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Doug Mitchell of Moments of Clarity points out that Forbes Magazine has ranked Des Moines as the 4th most desirable place in the U.S. to do business.  Doug says it is No. 1 in his book.

Adam Steen of Growth Capitalism writes about the Generation Iowa Commission whose goal is to address the "brain drain" in Iowa.

Hmmm...seems like the Commission could start by sharing the Forbes article with young Iowans.

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The Limited Liability Company is a hybrid form of doing business that combines characteristics of the corporate structure and the partnership structure. It is a separate entity like a corporation and therefore carries liability protection for all of its members/owners, but is generally taxed like a partnership which has the benefit of flow-through taxation.

The owners are called members and can be virtually any entity including individuals, corporations, other LLCs, trusts, pension plans, etc. Some states, like Iowa, permit one-member LLCs, and others do not. If you are going to do business in multiple states, it may be wise to have at least two members of the Limited Liability Company. A husband and wife are considered two members for formation purposes.

The manner in which the Limited Liability Company will be operated is set forth in an operating agreement, which is an agreement between the members. The operating agreement for a Limited Liability Company is similar to the by-laws for a regular corporation. It is a good idea to have an Iowa business lawyer draft your Articles of Organization and Operating Agreement if you intend to form your business in Iowa.

The Articles of Organization are filed with the Iowa Secretary of State's office just like is required for a corporation. The filing fee is currently $50.00 for filing the articles. The LLC must also file a biennial report (new in 2006). The cost is currently $30.00 for online filing.

In many respects, a Limited Liability Company is very similar to a Sub-Chapter S Corporation. However, the Limited Liability Company provides much greater flexibility with respect to owners and the allocation of income to the owners. An S-Corporation may only have one class of stock, while an LLC may offer several classes of member ownership. Any number of entities or individuals may own interest in an LLC; however, ownership interest in an S-Corporation is limited to no more than 100 shareholders. Also, S-Corporations cannot be owned by C-Corporations, other S-Corporations, many trusts, LLCs, partnerships or non-resident aliens. LLCs are allowed to have subsidiaries without restriction, while S-Corporations are not allowed to own 80% or more of another corporation's shares.

Like a regular corporation, the primary advantages of forming a Limited Liability Company is the liability protection the corporate entity affords its members (shareholders with respect to a regular corporation). The members of a Limited Liability Company are not liable for the debts and obligations of the company. By comparison, in any Sole Proprietorship or Partnership, the owner's personal assets may be used to pay debts of the business. Another advantage relates to the on-going existence of the company. If an owner of the company dies or wishes to sell their interest, the corporation can continue to exist and do business. If an owner of a Sole Proprietorship or Partnership dies, generally the business or partnership also terminates.

Unlike a regular corporation, the wages paid to the members of a Limited Liability Company will be subject to self-employment tax; however, self-employment tax may be avoided on members who do not participate in management of the company. It is important to consult an accountant to determine which form of business provides the best tax advantages for your situation and a business attorney regarding the legal aspects of LLCs before making any decisions on which entity to form for your business.

Click here for more information on forming an LLC in Iowa.

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Drew McLellan of Drew's Marketing Minute recently celebrated the 1,000th comment on his blog.  He now has over 600 blogs linking to him.  Quite amazing considering his blog is only seven months old. 

Drew is just one of the great business bloggers you can read on the Central Iowa Bloggers News River.  For example, you can read all about Mitch Matthews and his game 'Q' - recently featured in the Des Moines Register.  Or learn some great tips from sensational bloggers such as Mike Sansone and Michael Libbie who have been featured or quoted in the Register too many times to count.  And perhaps you may want to check out a budding TV star, Adam Steen. His speed networking events have caused quite a stir here in the Des Moines business community.  If intellectual property is your thing you will definitely want to check out the Blawg IT from Des Moines Iowa Patent Attorney Brett Trout. 

Who created this news river?  None other than the boys at Simplifive.  I have a feeling Andy and T.J. are on to big things.

There are a lot of other great bloggers on the river.  Be sure to check it out for yourself.

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I read an excellent article by Adam Siegelhiem of Stark & Stark concerning Restrictive Covenant Agreements for Franchises.  Although his post is intended for franchises it is advisable for any business to consider restrictive covenant agreements for their employees.

Somewhat surprisingly, many of the small business owners I talk with are reluctant to enter into restrictive covenant agreements with their employees.  These business owners are afraid that the employee won't sign or that other confrontations may occur.  Some just don't believe they should keep their employees from finding another job - even if it is to the employer's detriment.

But in order to avoid disruptions to your business and client relationships you should consider various agreements to protect yourself including, but not limited to:

• Confidentiality agreements;
• Non-compete agreements;
• Non-solicitations of clients;
• Non-solicitation of company employees.

If you are one of those who is not comfortable with a non-compete agreement for your employees I would strongly encourage you to have at least the confidentiality and non-solicitation agreements.  These agreements generally provide protection for your business without restricting the employee's ability to work elsewhere.  If a departing employee attempts to take clients or other employees with them you will be glad you had those agreements in place.

* Remember these types of agreements are very state specific so it is important to seek the advice of a business lawyer in your state before implementing the agreements discussed in this post.

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