blog radio

I have added podcasts to Rush on Business through BlogTalkRadio.  The first podcast is an interview with Iowa patent and information technology lawyer Brett Trout concerning the important federal rule changes regarding electronic discovery and how it impacts your business.  Brett is the author of Internet Laws Affecting Your Company.  As Brett says, bury your head in the sand regarding electronic discovery and you may pay a hefty price.  All companies, large and small, must familiarize themselves with the new rules and plan accordingly.  If you wait until you get sued, it’s too late.

Listen to the electronic discovery podcast by going directly to my BlogTalkRadio Host Page.  The podcast is free.

Another upcoming podcast includes an interview with Matthew Ashburn from Sunbelt Business Brokers in Ankeny and Cedar Rapids.  Matt has a lot of interesting information regarding how to prepare your business for an eventual sale.  The key is good advance planning and it makes a big difference.

I hope you enjoy this new added feature to Rush on Business.

Wiggin and Dana’s Franchise Law Blog has a discussion about the amended FTC rules for franchises.  The new rules require franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, its officers, and other franchisees.

Required disclosure topics include, for example: the franchise’s litigation history, past and current franchisees and their contact information, any exclusive territory that comes with the franchise, assistance the franchisor provides franchisees, and the cost of purchasing and starting up a franchise. If a franchisor makes representations about the financial performance of the franchise, this topic also must be covered, as well as the material basis backing up those representations.  The new rules are designed to require more extensive disclosures in certain aspects of the franchisor-franchisee relationship.

The amended rules have a phased-in effective date: as of July 1, 2007, franchisors may follow the amended rules, or they may continue their current practice of complying with the original rule or individual state franchise disclosure laws that require an Uniform Franchise Offering Circular (“UFOC”); but by July 1, 2008, they will be required to follow the amended rules only.

New York small business lawyer Imke Ratschko wrote an excellent blog post on Web incorporation services.  She found a blog post by a California business lawyer who described a certain Web incorporation service as almost a scam.

Imke also shares her reasons why people are better off choosing business lawyers to perform incorporation and LLC formation services.  Her list:

  • Many business attorneys make it easy for you by offering flat fee business entity formations and initial free consultations;
  • a real person with a law degree takes responsibility for your business entity formation;
  • a real person with a law degree is available to answer questions and help you decide what business entity is right for you;
  • a real person with a law degree can help you draft an operating agreement or shareholder agreement.  Web services do not usually draft these agreements for you.  If they do, you will get a "one size fits all" agreement that can be worse than not having one at all.
  • a real person with a law degree will remember you and your business and remind you of follow up legal issues in running a corporation or LLC, maybe even years later.

I couldn’t agree more with Imke.  Many business lawyers, including myself, provide incorporation and LLC formation services on a flat fee basis.  The major difference is that when you see a business lawyer for your services you will actually receive legal advice.  You just don’t get that from a Web incorporation service.  Don’t take my word for it – just read their disclaimers.

A couple of months ago I received Sirius satellite radio as a gift.  I love it except for one constant ad that drives me absolutely bonkers.  About every fifteen minutes I hear an ad from LegalZoom, a legal document company.  LegalZoom touts that its fees are 85% less than those of lawyers. 

First, with most Iowa lawyers the fee comparison is just not accurate.  Second, while LegalZoom’s ad says it is not a law firm it fails to highlight an important part of its disclaimer pointing out that the legal information on their site is not legal advice and is not guaranteed to be correct, complete or up-to-date.  But as they say, it is experience you can trust.  Or is it?  Be sure to check out this post from a Colorado lawyer who loves LegalZoom because he has landed more business fixing mistakes from LegalZoom than he would have earned had he done the work in the first place. 

One of the craziest things LegalZoom offers is a prenuptial agreement.  First, if you have enough money for a prenuptial agreement you can afford a lawyer.  Second, a prenuptial agreement is one area of law that if a mistake is made it could cost you – I’d say approximately half your assets.  Let’s just say I have trouble believing any attorney worth his or her salt – including those "top attorneys" who founded LegalZoom – could in good conscience recommend a person use a legal forms company for a prenuptial agreement.  I also wonder what my friend Brett Trout thinks about their offers on patents, trademarks and copyrights.

Use LegalZoom if you must but I highly recommend talking to an attorney before you go that route.  You might be surprised by the expense comparison, and even if the cost is slightly more, the legal advice is usually worth it.  As the saying goes, you can pay now or pay later.  The choice is up to you.

The U.S. Supreme Court has decided to hear an important employment discrimination case in which a Coca-Cola bottling company fired a black employee.  The case involves allegations that a supervisor was motivated by racial bias and influenced a human resources manager to fire the worker.  The human resources person was located elsewhere and did not know the employee’s race.  Such circumstances are sometimes referred to as "cat’s paw" liability.

The Court will be asked to consider whether an employer can be held liable for intentional discrimination when the person who fired the employee harbored no discriminatory bias.

See also the Tennessee Business Litigation Blog for a discussion on the case.

On December 31, 2006, I wrote a post on how Blog Monitoring is a Top Trend for 2007.  Today’s Des Moines Business Record cover story is Exhibit A.  The story recounts how smart companies are listening to bloggers and dealing quite effectively with negative publicity.  It seems Central Iowa blogger Tom Vander Well recounted on his blog about an unfortunate customer service experience he had with the Geek Squad, a subsidiary of Best Buy.  Needless to say, Tom didn’t have good things to say about Best Buy or the Geek Squad. 

So what happened next?

Geek Squad founder, Robert Stephens, emails Tom and tells him, "We shall not rest until your problem is addressed."  Now that is service!  But also very resourceful.  If Robert Stephens had not been monitoring RSS feeds that never could have happened. 

Why should lawyers care?  First, monitoring blogs and Web sites through RSS feeds give you INSTANT KNOWLEDGE.  Now you are able to know when someone has said something good or bad about your law firm, your competitors, your clients and legal developments.  Smart companies involved in litigation or disputes (i.e. Mediacom and Microsoft) are monitoring blogs and better understand how to deal with public opinion. 

But here is the best part (this is where YOU may earn a client for life and you don’t even need to be a geek).  You have the perfect opportunity to show that you CARE.  If something appears on the Web about your client or if there is something that interests or impacts them you have the opportunity to forward it to them in a record amount of time.  It is conceivable that you may know your client has been sued before the client knows.  Do you think that would help you to keep a client for life? 

You don’t need to blog – just start reading feeds.

I ran across an excellent article by employment law litigator Jason Storipan of Stark & Stark on issues involving electronic discovery and employment law.  Storipan cautions that employers must be aware and plan for the new electronic discovery rules:

". . . [e]mployment law is an area of the law that the increases in the use of technology in the business world increases the risk of a lawsuit.  As any employer is aware, technology has changed the workplace, and its use can create a host of problems in the workplace that can lead to litigation.  The new Rules on electronic discovery potentially can lead to even more problems for the unprepared employer.  In this instance, the best way for the employer to prepare is to plan as if it is involved in litigation and meet with its counsel." 

I agree with Storipan.  Early preparation for electronic discovery by companies is crucial.  The duty to preserve electronic materials begins when a company reasonably anticipates litigation, not once litigation begins.  Spoilation is the destruction of of evidence.  There are significant consequences for destroying evidence.  Employers must be aware of how to preserve this evidence and comply with the new electronic discovery rules.  Waiting until you get into litigation is not the answer.

FYI:  Patent and information technology lawyer Brett Trout of Des Moines is also planning a series of posts on electronic discovery issues.  Be sure to check those out.

Jeff Mathias is the author of a new law blog called Bankruptcy Cafe.  He already has some nice posts including 8 Tips to Rebuild Your Credit After Bankruptcy and 10 Common Bankruptcy Mistakes.  His writing style is very straight-forward and informative. 

Jeff is savvy when it comes to providing information to the public through the Internet and other publications.  If you need bankruptcy information this blog will be a great resource.

Microsoft has renewed its attacks against Roxanne Conlin in the Iowa consumer class action case.  This time Microsoft wants the right to question the named plaintiffs about their connections to Conlin before the lawsuit.  Apparently Microsoft believes Conlin recruited these plaintiffs to file the lawsuit.  According to the Des Moines Register, Conlin acknowledges she was friends with some of the plaintiffs before the lawsuit began.

Judge Rosenberg had previously ruled that Microsoft could not ask the individual plaintiffs about their connections to Conlin.  Microsoft now claims Conlin and her co-counsel opened the door when they told the jury the plaintiffs were "just regular people".  A ruling on this issue is expected soon.

Earlier in the case Microsoft attempted to disqualify Conlin alleging she had engaged in misconduct while obtaining certain documents.  Judge Rosenberg said there was no misconduct by Conlin and allowed her to stay in the case.

Recruitment by plaintiffs’ counsel would be inappropriate and could raise questions about whether the class is properly certified.  On the other hand, there is nothing that prevents a lawyer from representing a friend.  Many lawyers represent friends or acquaintances.  But rarely do cases involve $300 million in damages.  The stakes are high and Microsoft is pulling out all the stops.   

UPDATE:  Judge Rosenberg ruled in favor of Conlin and the plaintiffs.  Microsoft is not allowed to question the named plaintiffs about their connections to Conlin before this lawsuit.  That’s strike two in misconduct allegations against Conlin.

 

I tell clients they need to establish relationships with at least four professionals when starting a business including:

  • Lawyer
  • Banker
  • Insurance Agent
  • Accountant

As tax season kicks into full force many business owners may be considering hiring an accountant to complete their business taxes.  I always get worried when a business person tells me he or she does not have an accountant for their business.  In my view, a good accountant for your business is absolutely essential.

This article from About.com talks about how to hire the right accountant.  One of the best pieces of advice from the article is that you should make sure your accountant works on business tax returns.  Not all accountants specialize in business tax returns.  The article points out that big tax preparation chains such as H & R Block and Jackson Hewitt generally cater toward individuals and you may want to consider going elsewhere for business tax returns.

I wonder if fellow Iowa blogger and accountant, Joe Kristan could weigh in with some sage advice on this topic.