Want some great business advice?  Looking for something interesting?  Try out these posts:

Matt Gardner has an interesting post on his Wealth and Estate Planning blog about the "pot of gold" Iowa landowners are sitting on because of the renewable energy craze and why they should review their estate plan.  (Sounds like Iowa farmers have something in common with today’s hip-hop stars  – both ignore estate planning). 

Michael Moore (this one’s no sicko) talks about what not to do when it comes to employment record retention / destruction policies on his Pennsylvania Employment Law Blog.  Michael has written some great material on this subject and has some terrific comments on this blog as well. 

Roy F. Harmon III addresses record retention for ERISA Plan administrators on his Health Plan Law blog.

Carl Lingren shares key interviewing tips for employers on his Employer Ease blog.

Brett Trout says technology lawyers are so hot but have you seen this guy’s face lately.  (Trust me, there is a story there).

It is possible to form your own corporation without a lawyer’s help.  Every day, many entrepreneurs do exactly that by using online incorporation kits.  I have written about such companies in the past.  There is definitely a segment of the market these incorporation companies serve.

The most obvious motivating factor for setting up a corporation on your own is to save fees.  But there is a potential trade-off.  You now subject yourself to the hassles of filing a corporation yourself and the possibility of filing erroneous paperwork.  At least if you hire a lawyer you have someone to blame, right?

But the real question to ask yourself is this:  "Have I considered how it all fits together?"  See this post on incorporating in Iowa for a checklist of steps.

But filing articles of incorporation is only one step in the process.  Have you also considered:

  • Is a Corporation the right entity for me?
  • Bylaws.
  • Shareholder Agreements – Buy/Sell Issues.
  • Board of Directors.
  • Officers.
  • Employees.
  • Obtaining an Employer Identification Number (EIN).
  • Banking arrangements.
  • Issuance of Stock.
  • Financing your corporation.
  • Insurance.
  • Whether or not to elect S corporation status.
  • Corporate name protection.
  • State government requirements.
  • Taxes.
  • How to Avoid Lawsuits.
  • Following corporate formalities.
  • Signing documents as an officer.
  • Assigning existing business to the Corporation.
  • Leases.
  • Intellectual property.

The above list is just a sampling of the issues you may deal with as you start your business.  A good business lawyer should be able to help you with all these issues either by providing you with direct advice or connecting you with someone else (often accountants, bankers and insurance agents) that can help fill in the gaps.  Most business people will tell you that hiring a good lawyer is crucial to your business success.   Plus, you might actually be surprised at the cost of hiring an Iowa lawyer compared to some of the online incorporation companies.  

How do you hire an Iowa business lawyer?  I suggest you follow two rules:

1. The attorney must be experienced and competent with business law issues.  Since you are in business you probably should not hire the local personal injury, family law or other attorney that does not have experience with business law issues.  Choosing a lawyer that is not familar with business law may have serious consequences and may increase the costs because the lawyer may learn on your dime. By analogy, you don’t want a plastic surgeon operating on your heart.

2.  Make sure you feel comfortable with the attorney.  Don’t make a snap decision based upon hourly rates.  Do you trust the lawyer?  Did you get your call returned right away?  Is the attorney easy to talk with?  Does the attorney care about you and your business?  Does the relationship feel right?  There are many competent and experienced business attorneys in Iowa so make sure to trust your instincts.

 

The Business Innovation Zone (BIZ) has its first networking event today.  The event is from 12:00 – 1:30 p.m. in the Arthur Davis conference room at the Greater Des Moines Partnership office at 700 Locust Street in Des Moines.

The featured speaker is Steven Smith, President and CEO of GCommerce.  He will be talking about early stage equity funding for startup business, and what has changed in recent years. Lunch will be provided and there will be plenty of time for networking. The cost for the event is $8 for members, and $12 for non-members.

Jerry Kalish of The Retirement Plan Blog expanded on my post involving Document Retention and Electronic Discovery to discuss record retention under ERISA.

The post has a Q & A with basic information on document retention for ERISA plans. 

P.S.  You may also want to check out Jerry’s informative post on "tax traps for the unwary" involving "S" corporations. 

Eric Swenson of Managing People in the 21st Century discusses how small businesses will sometimes "borrow" and "modify" another company’s employee handbook in an effort to save money.  Swenson’s post illustrates why this is a bad idea. 

In one instance, a small company not required to offer FMLA benefits under the law was required to do so because of misstatements in their employee handbook.  The article from the Sedgwick Law Firm in California refers to an Iowa Federal Court decision by Judge Bennett in Myers v. Tursso Company, Inc.   Judge Bennett held it is possible that an employer with fewer than 50 employees within a 75 mile radius, could still find themselves "required" to grant FMLA leave, based on their conduct, even though not technically within the coverage of the statute. 

For more check out the article by Michael Fox on Jottings by an Employment Lawyer.

From Mike Colwell of Biz I learned about Franchise Interviews which is another resource for those interesting in franchising.  The site has several interviews with successful franchisees, franchisors and franchise experts (including lawyers).

I listened to the interview with leading franchise lawyer Kevin Hein of the Denver office of Snell & Wilmer. ( An interesting interview but the actual interview does not begin until 24 minutes into the 1 hour program).  Hein shared insight on what is necessary for a successful franchise concept.  His four points:

  1. Unit economics – How much can individual franchisees make?  Will it generate revenue to cover expenses, pay a reasonable salary and give a return on investment?
  2. Reasonable Demand for the Product – sometimes franchises may have unique niche, yet no significant demand.  A franchise must have real interest.
  3. An easily replicated system – The more detailed the system the harder it will be to replicate.  Are you able to give the same customer experience no matter the market or region.  
  4. Unique marketing proposition – How do you stand out? 

Later in the program Hein struck a chord with me when he warned about franchisees "buying themselves a job".  I have noticed that many franchisees do not carefully consider whether they will receive a return on investment when purchasing a franchise.  Obtaining a return on your investment may be difficult with many franchise concepts – so be sure to analyze potential revenue and conduct your due diligence.

P.S.  Another resource to check out is Seeds of Growth which is where Mike spotted the link to Franchise Interviews.  It features some great posts to help your business grow.

 

Upon my return from vacation I ran across a site called The Franchise Pundit.  I have been looking a long time for Web sites that give balanced information on franchises rather than just reciting promotional materials.  The Franchise Pundit appears to be such a site. 

If you are conducting due diligence on a franchise you may want to investigate the site.  In a short time I discovered several articles providing practical information on several franchises.  Be sure to check out the franchisor list to see if there are any articles on your franchise of interest. 

If you know of any other sites that provide fair and balanced information on franchises please let me know.

I am excited to announce that the Sullivan & Ward law firm will publish its Iowa Law Blog beginning in mid to late August.  The firm’s law blog will cover general legal issues inlcuding the following areas of law:

  • Utility and electric cooperative law;
  • Business law;
  • Trusts and estates;
  • Family law;
  • Real Estate law;
  • Trial & mediation; and
  • Regulatory compliance.

It will be a group effort by the lawyers at Sullivan & Ward.  Our friends at Lexblog are developing the blog.  Kevin and his staff have been great to work with.  I’ll let you know when it hits the blogosphere. 

Michael Moore has an informative post on Developing a Record Retention Policy on his Pennsylvania Employment Law Blog.  Michael raises a particularly insightful issue:

Anticipate the arguments that may be made and inferences that could be drawn from the destruction of certain documents and weigh it against the expense of retaining and producing the documents.

In a comment left on my Document Retention and Electronic Discovery post Michael pointed out that businesses need to carefully consider how the destruction of records pursuant to a policy might play to a jury.  Often it may be important for a business to retain the information rather than destroy it.  He warns,

The employer that destroys old e-mails "pursuant to its record retention policy" is left with the inference that the e-mail may have existed and, even worse, it was destroyed in order to keep the truth from coming out. 

I agree that you must carefully consider these policies.  That is why it is so important to assemble a team in order to develop a sound document retention policy.  I would caution businesses to avoid pulling a form, changing the names and feel like you are covered when it comes to record retention.  You should take into account the various ways your organization stores information and be sure to get the IT staff involved in the process.  This will help you determine whether it is beneficial and practical to keep or destroy certain information.   But whatever happens, do not forget to implement a litigation hold in the event of a dispute.

Part of the trial lawyer’s job in business cases is explaining to the jury how a document retention policy works, why it was implemented and the methods by which the business consistently follows it policy.  Developing trust can help alleviate the thoughts about businesses just wanting to keep the truth from coming out. 

Yesterday I had an interesting discussion with one of my buddies.  He is an executive with a Fortune 500 company out-of-state and he was expressing his frustration with lawyers – actually his own lawyers.  He just got off the phone with one of his outside counsel when I called.  After talking with him for less than 30 seconds I could tell the last person he wanted to talk with was another lawyer. 

Although not word for word his frustrations could be summed up in a post from Dan Hull called the 7 Habits of Highly Useless Corporate Lawyers.   This post is right on the mark and should be required reading for every corporate lawyer in America.  The biggest frustration?  No. 3 – Taking a stand.  Nothing seems to frustrate business people more than a lawyer who comes down squarely on both sides of the issue. 

The cure:  try listening to your clients.  You might be surprised what you learn.