...For the want of a comma... In the law, as in business, details matter.

In this modern age, who needs lawyers?  There are resources which will provide many of the documents a business might need free of charge, or for the fraction of the price of a lawyer.  It is true, that these documents are generic, that they do not necessarily consider your specific intent, and they may not be very detailed; but they look they part and they do the job – until they don’t.

The problem is that the law, the interpretation of contracts and statutes, is not generic.  Intent and detail matter.  Consider the case discussed in this article.  

That case resulted in a $10,000,000.00 (yes, that’s ten million dollars) judgment in favor of the plaintiffs, and it turned on very specific details and the interpretation of intent.   As the Appellate court noted in O’Connor v. Oakhurst Dairy, 851 F. 3d 69, (2017), “…for want of a comma, we have this case…”  It does not get much more specific, detailed or intent driven than a ten million dollar loss over a comma. 

In O’Connor, drivers for Oakhurst Dairy sued the company over its failure to grant them overtime pay. Under Maine law, workers are entitled to overtime when working beyond 40 hours a week. However, in all its wisdom and (no doubt) that of the lobbyists of certain industries, the legislature carved our an exemption for work that included:  “…The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: 1. Agricultural produce; 2. Meat and fish product; and 2. Perishable foods…” 26 M.R.S.A. § 664(3)(F). 

The question in O’Connor turned on the lack of a comma between “packing for shipment…” and “…or distribution…” in the statute.  The Dairy argued that the drivers did not qualify for overtime because they engage in distribution, and that the exemption to the overtime requirement included “packing for shipment” and “distribution” as separate exempt activities.  The drivers, however, pointed out that the law, as written, excluded “packing” regardless of whether it was packing for shipment or packing for distribution. Distribution by itself, in this case, would not be exempt.  The court agreed and it cost the dairy dearly.

Yes, this is a case over the interpretation of a statute and not a contract.  However, the principle is the same.  In the law detail, specificity, and interpretation of intent matter a great deal.  How comfortable are you with that cheap, generic, vague contract that looks the part and may do the job – until it doesn’t? 

Many businesses look at legal expenses as simply that, an expense which should be kept to a minimum.  They fail to see the hidden value of ensuring that the company’s legal affairs are addressed by a professional who tailors them to be detailed, specific to the needs of the company and married to the intent and long term goals of the organization.  Perhaps it will not matter.  But when it does, it could drive them out of business or, as would have been the case for the delivery drivers in  O’Connor had they not focused on details, specifics and intent,  cause them to miss out on a multi-million dollar opportunity.

The trick is to manage legal expenses, to make them predictable and part of the budget.  While it is impossible to reduce all risk, hiring an out-sourced general counsel for your business at an affordable, predictable monthly fee can ensure that your company has an attorney who is focused on the details, specifics and intent that are inherent in the legal aspects of your business.  This will allow you to focus on your business and give you the peace of mind to thrive.

If you wish to discuss how an out-sourced legal counsel agreement can help your business, call The Maughan Law Group .We can conduct a proprietary review of your business to determine whether this solution is right for you.

Its time to change how we access legal services.

As a small business owner, the son of a serial entrepreneur, and a lawyer who works with entrepreneurs, growth oriented businesses, and their executives on a regular basis, I have learned that there is a constant companion to the excitement of business growth, the exhilaration of a new deal which makes you feel like you have the whole world in your hands, and the anticipation of moving to a new facility.  That companion is worry.  It’s a gnawing doubt that forces you to ask yourself in the still of the night: Is everything in place?  Is our agreement solid and enforceable? Is that contract flexible enough for us to achieve what we need to do? Are the terms of this lease too restrictive on growth?  Are my personal assets really protected if this deal falls apart? How do I get out of this if it does not work out well?  Will firing that toxic employee expose us to legal risk that might de-rail our strategic plan?

            These doubts and fears, if allowed to fester and crowd out your sense of optimism, can paralyze growth, force opportunities to go wanting, and transform a business from that grand adventure which once filled you with hope, excitement, and a sense of purpose into a dark and foreboding gulag where you sit, trapped, constantly breaking rocks, too scared of what might happen if you put down the hammer and look to the sky. 

            Fortunately, resilience in the face of doubt and fear is one of the key traits of successful business owners and entrepreneurial types.  These are people who can put aside the gnawing concerns, suppress the doubts, and force the fear into a small space where it cannot overwhelm the entrepreneurial dream.   This is sometimes the default of those of us who are busy working in our business, focusing on the big picture, and executing on the technical aspects of production.  There is a tendency to ignore the fear and hope that the questions either resolve themselves, or never come to fruition.  We comfort ourselves, in this ever-connected world where information is at our fingertips, with the knowledge that we can download basic agreements, checklists, contracts and other legal documents with the click of a button.  These generic, on-line solutions allow the task to be completed and give us a veneer of confidence as we whistle past the graveyard, trying not to think of what may lurk in the shadows.  However, the doubts and fears are resilient in their own right.  They linger and whisper to us in the night, persistently and despite our best efforts at optimism. 

Large Corporate entities silence these fears through the office of their General Counsel and a staff of in-house lawyers who seek to assuage concerns, minimize risks and resolve issues when they do arise.  This leaves the business executives free to focus on strategic corporate goals and the implementation of their plans.  The down side to this approach is that it is expensive and can often lead to a culture of risk aversion, turning the once-nimble disruptor into the slow, uninspiring leviathan. 

Another approach is to hire outside counsel on an ad-hoc basis to address issues as they arise or to allay the greatest of the doubts and concerns long enough to allow the company to move forward.  Often this means hiring a lawyer who is not integrated into your business, has little understanding of your core strategic goals and no real empathy for the underlying dream.  While they will be able to address the issue presented, they will often do so while billing by the hour at an exorbitant rate, which discourages the business owner from addressing related or bigger issues and encourages the lawyer to be slow and inefficient.  The result is that the most pressing concerns gets addressed, but at a cost which disrupts the business momentum, disturbs cash flow, and leaves the persistent nagging concerns whispering in the background.

Confidence and peace of mind are vital in order to allow the business owner to identify opportunities, take risks, and grow their business in accordance with their overarching vision while maintaining the optimism and excitement which prompted the creation of the venture.  Legal services should help foster this sense of confidence and provide peace of mind.

The usual approaches to risk management, legal planning and regulatory compliance, are inadequate in that they either fail to give true confidence and peace of mind or they degrade the ability to be nimble, visionary and growth orientated.  They can offer varying degrees of peace of mind, but at an unacceptable cost in terms of time, money, energy, culture, and direction.   What is needed is a pro-active approach to integrate legal planning, risk mitigation, and day to day compliance with the overall strategic business framework.  Outsourced general counsel agreements can offer this solution.  By limiting the number of clients and committing to integrate into their client’s business, learn the culture, and internalize the company’s vision, a lawyer offering outsourced general counsel services can silence the whispering doubts and provide the confidence and peace of mind that comes with knowing that the legal issues will be addressed in a timely, efficient manner, consistent with the business’ values, strategy, and vision. 

The out-sourced general counsel model can ensure that long-term legal planning and compliance is integrated into your business model for a predictable, recurring monthly fee that is substantially lower than setting up an in-house legal department, and is less disruptive and expensive than retaining outside counsel under the traditional hourly billable model. This new approach to legal services is relationship-based.  It encourages the lawyer to form a relationship with the business, encourages relationships between key stakeholders within the business, and encourages free-ranging discussions about the business goals, dreams and fears. These discussions allow for long-term, forward-looking, and integrated legal advice.  The result is that the gnawing doubts shrink while vision, productivity and growth expand.

Like many aspects of the modern, fast-paced, entrepreneurial business, the way we access legal services and implement legal advice must change.  If we are to compete with the big box companies, remain disruptive and increase innovation we cannot rely upon the old, outdated model.  Rather, we must seek modern, nimble, and innovative ways to utilize legal services.  Entering into an outsourced general counsel agreement allows you to do this in a way that is customized for your business.

At Maughan Law Group LC we strive to facilitate your version of the American Dream and to help you maintain the focus you need to thrive.  By working with business clients on a flat fee basis, and as out-sourced general counsel to qualifying client on a predictable monthly contract basis, our firm strives to become that trusted legal advisor who can give you peace of mind allowing your business to thrive.

We act today in order to reap future benefits.

We recently built a house in the country.  It is beautiful and peaceful, but there is one drawback; there are no trees.  The lack of trees, buildings and other effective windbreaks – along with the fact that we live in Kansas – means that the wind howls, almost constantly. The solution is to plant a wind break – a line of trees such as the red cedar which have dense, bushy branches which will grow outward as the tree grows upward.  Over time the branches will merge together forming a barricade against the wind. The problem is that trees grow rather slowly and transplanting fully grown trees is expensive while planting them young provides a tree line which is ineffective at blocking the wind in the early years.  It is this observation that prompted a friend, upon viewing our nascent tree line,  to quip: “We plant the windbreak for the next generation!”

While I certainly hope that it will not take a generation for our windbreak to become effective, there is some truth in my friend’s cynical comment.  In business, as in life, we often take actions, not for the immediate benefits we reap today, but for the benefits, value or security they will provide in the future.  This often makes it difficult to see the direct value of the planning, work and investment in which we engage today.  Nevertheless, we work, we plan, we invest, and we take action trusting that, in time, we will reap the rewards.  We perform regular maintenance on our equipment, not because it will cause the machine to run better today,  but because we know it will increase the life spam and total value of that equipment. We buy insurance, not because there is an immediate reward, but to provide protection and security against a potential  future hazard; and, we pour resources into capital investments believing that doing so will make our business more effective, efficient and profitable in the future. 

The “deferred gratification” approach to life and business has helped businesses find success for generations,  and yet, when it comes to considering the legal and regulatory environment in which our business operates, many will only pay attention when something breaks, something goes wrong, or there is an immediate need for a service which will facilitate some current business requirement.  The price that is paid for buying legal services with an immediate gratification mindset is high.  It is often high in a literal dollar amount when we are forced to pay an unpredictable bill based upon an exorbitant hourly-rate (often resulting in some serious cash flow problems).  However, the high cost is sometimes less obvious.  As with ignoring regular equipment maintenance, there are hidden costs to addressing the legal needs of your business on an “as needed” basis.  Under this practice the lawyer who does the work is not steeped in your company culture nor intimately familiar with your long-term business goals.   The cost of consuming legal services which satisfy an immediate need, but may not be consistent with your values mission and culture are often intangible but, in the long term, can lead to disaster.  Perhaps more importantly, that legal issue which led to a budget busting, large legal bill may have been avoidable with some consistent, pro-active legal advice and counsel in the preceding weeks, months and years.

Just as constant minuscule course corrections will keep a pilot on track and a minor deviance from course will, if uncorrected, lead him far from his destination, so the consistent assistance of a trusted legal adviser and counselor will keep your business on track and allow you to focus on your goals and profitability.

If you are in business you should have a trusted legal adviser who becomes familiar with all facets of your business and can provide constant course corrections throughout the journey.  Doing so will help avert liability and ensure that all legal aspects of your business are handled in a manner which is consistent with your long-term strategic goals.

Just as the work and expense necessary to plant the windbreak will protect our home from the relentless howling wind in the future, so availing yourself of on-going, consistent and integrated legal advice as you grow your business will protect your company in the years to come.  If you doubt this, simply ask yourself why so many of the most successful businesses invest in entire in-house legal departments.

At Maughan Law Group LC we strive to facilitate your version of the American Dream and to help you maintain the focus you need to thrive.  By working with business clients on a flat fee basis, and as out-sourced general counsel to qualifying clients, our firm strives to become that trusted legal adviser who can provide legal advice and guidance which is integrated with our clients’ strategic business objectives in order to help them thrive.

Is the sun rising or setting on your business?

During the Constitutional debates George Washington, as President of the convention, sat at the front of the hall in a chair which bore a carving of a half sun.  According to James Madison, at the final signing of the U.S. Constitution, Benjamin Franklin sat, staring pensively at the chair in front of the hall and remarked:

"I have often ...in the course of the session...looked at that sun behind the President without being able to tell whether it was rising or setting. But now, at length, I have the happiness to know that it is a rising and not a setting sun."

The truth is that it is we who decide whether the sun poised half way above the horizon is about to rise and bathe us in rejuvenation warmth and light; or is it about to set, leaving us to struggle through the cold, dark night.

In business, it is the decisions we make and the actions we take which determine whether a new day us dawning and our enterprise will bask in growth bringing sunlight; or whether darkness cometh. The risks which can plunge us into darkness abound.  How we handle our affairs and protect ourselves from liability can make all the difference.

If you own, or manage, a small business there are certain actions you can take which will go a long way toward determining whether your sun rises or sets.  Below is a partial list of some important considerations to which busy business owners often pay too little attention:

 

·         Ensure that the company has the appropriate  liability shield.  Whether it is through the protection of a corporation; limited liability company; or limited liability partnership, the need to protect the personal assets of the owners and managers is essential.  Nevertheless, the number of businesses operating without such protections is alarming.  Even when the business does operate under the protection of limited liability, many companies fail to consider whether certain portions of the operation can be protected from the liability of other areas of the business enterprise.  Sometimes it makes sense to spin off portions of the business to operate as separate entities with their own liability protection.

 

·         Properly maintain the liability shield to prevent it from being pieced.  The existence of the shield is not enough to ensure protection from liability.  The business must be run and operated as a business entity.  Avoid mingling personal assets and expenses with business assets and expenses and, when it is unavoidable, document the steps taken to reimburse the business or the individual; Ensure that the business is holding itself out to the public as a limited liability entity; Ensure that all annual reports are filed and that the proper documentation  of business decisions and meetings are maintained.

·         Protect the company’s intellectual property.  Is the trademark, trade name, service mark, logo and work product properly protected from misuse by others?  Or, is someone else profiting from the hard work and well-earned reputation of the business?  Conversely, ensure that the business is not inadvertently violating someone else’s copyrights. (Are all images on websites, promotional materials and presentations used with proper authority?)

·         Ensure that written and up-to-date agreements are in place with all employees, and independent contractors.  These contract should clearly spells out their duties, obligations and remuneration. 

·         Take steps to protect the privacy, safety and security of all employees, customers, contractors and vendors.

·         Have clear, complete and up-to-date written agreements with all clients, customers, vendors and suppliers.

While this list is incomplete, it is offered, not as specific and complete legal advice, but in the spirit of education in order to encourage our fellow business owners and operators to give some thought to the areas of their business in which they may be at risk.  Whether the sun is rising or setting is often in our control, if only we would choose to exercise that control.  The goal is avoid the risks and liabilities which can turn a bright day full of possibilities and promise into a darkening night which must be endured and survived.  Proper legal planning, advice and counsel can help ensure that every sun is a rising sun.

-          Carl Maughan.  Owner, Maughan Law Group LC.

Maughan Law Group  LC provides out-sourced general counsel services and targeted legal advice to small / medium sized businesses. Our mission is to provide custom legal advice, counseling and guidance which is integrated with our clients’ strategic business objectives.  This allows our clients to focus on business and helps them avoid the misstep which can turn a promising future dark.  In short, we help them grow.

While I breath, I hope - but while I conduct business, I plan.

“Dum Spiro Spero”  is a Latin phrase attributed to Cicero.  It is also my family motto.  It means “While I breath, I hope.”  Emblazoned beneath a profile of a stag, the phrase forms part of our family crest. 

The stag is often associated with spiritual beings and was incorporated into the personal badge of King Richard II of England as a symbol of purity, a symbol of Christ, a symbol of the source of all hope.  Thus, it appears that, both in word and depiction, hope is the enduring theme of my family iconography.

Hope is a wonderful virtue, it talks of persistence, of a yearning for something better, of the driving force which moves us to persevere and whispers that there is something more; an unattained goal; something for which we should strive.  As such, hope can be seen as the cardinal virtue of entrepreneurs and business builders of all stripes.   It is something we should nurture, follow and cultivate. 

But hope is not a strategy.   Nor is it a tactic.  Hope will not move a business forward.  Hope will not grow the bottom line; and hope will not develop the business nor provide you the life- style, fulfilment and peace of mind that you seek.  Yet, hope is precisely the guiding force behind the approach that too many businesses take toward their use of legal services.

First, they hope that their business forms, formation documents, and partnership agreements are sufficient to provide protection from liability; They hope that the contracts, leases and other agreements will serve their interests; they hope that their business practices and HR policies will not expose them to law suits; they hope that they have sufficient insurance; they hope that the network of regulatory and tax requirements will not form a web in which they will be ensnared. They hope that those generic, on-line forms they downloaded will be sufficient.  And, when a crisis arises and they do hire a lawyer, they hope that they will be able to afford the hourly rate bill and they hope that their interactions with the lawyer will not be too disruptive to their business practice and not be too onerous on their time and other resources.

Again, hope is not a strategy.  Hope is a wish, a desire.  For hope to be realized, a strategy and plan must be in place.

Wise and successful businesses often integrate legal counsel into their business planning.  This allows the attorney to become one with the culture of the business and internalize the goals, strategies and tactics of the business so that the attorney can provide advice and counsel which is interwoven with the core mission of the business.  This, in turn, allows legal concerns to be mitigated, avoided or leveraged to the advantage of the business; and, when crises do arise, it means that they can be managed with minimal disruption, cost and concern.

This is a sensible business strategy which, despite common misconceptions, is not reserved solely for the mega corporations with their in-house legal departments.  To the contrary, it is a strategy that can be adopted by businesses of all sizes through the use of out-sourced general counsel agreements with a trusted legal advisor and counselor.

Hope is what keeps us going in hard times.  Intentional planning based upon the sound advice of trusted advisors is what keeps us from the hard times.  The investment in ongoing, legal advice and counsel which is integrated with our business planning is well worth it when hope is simply not enough.

Re-image what you believe to be possible

Re-image what you believe to be possible.  It may take some specialized tools, a lot of training, and a unique understanding of the environment and the forces that act upon you and with you.  However, once we recognize this, and harness this,  we can do amazing things and exceed what we believed to be possible. 

She rode a bicycle over 180 miles per hour at 45 years old.

Perhaps its time to re-image how your business interacts with your legal service provider .  Perhaps it always seemed impossible for your business to have an attorney who would integrate legal advice and counseling into every phase of your business so that you could be free to focus on your business and  achieve "impossible" goals.

Maughan Law Group LC offers out-sourced "Chief Legal Officer" services to small and medium sized business bringing legal advice into harmony with your core business strategy.

https://www.bicycling.com/news/a23281242/denise-mueller-korenek-breaks-bicycle-speed-record/

Comfort is overvalued. With discomfort comes growth.

Recently I have become re-acquainted with a sentiment that has been expressed in many different ways over the years.  It has become a standard refrain of business coaches, self-help gurus, consultants and motivational speakers.  Countless articles have been written on the subject such as this one from Forbes magazine. 

https://www.forbes.com/sites/jacobmorgan/2015/02/11/why-getting-out-of-your-comfort-zone-is-the-best-thing-you-can-do-for-your-career/ 

It has become so ubiquitous that it is almost a cliché.  Like all clichés it has become a virtual proverb because of its innate truth.  It is a sentiment which, while articulated in ways which range from poetic and inspirational to coarse and gritty, comes down to the same thing:  Comfort is overvalued.  Sure, its nice,  its familiar, its safe.  But does it help us get anywhere, do anything, achieve anything? Probably not. 

 

The fact is that comfort is the hallmark of stagnation and stagnation is the harbinger of decay.  Nothing grows in stagnation except for weeds, mold and rot.  Growth, real transformative and  beneficial growth, happens in the realm of discomfort, the realm of pain, where unfamiliarity and risk lurk.  Growth is uncomfortable, it is painful – sometimes excruciatingly so,  but it is necessary.  Without growth we sink back into the stagnant mire and the rot slowly sets in.

Nike founder, Phil Knight, expressed the sentiment multiple times in his autobiographical book, Shoe Dog͟ through the phrase:   “You grow or you die.”  The bible puts it this way: “A little sleep, a little slumber, a little folding of the arms to rest – then will poverty come upon you like a highwayman, and want, like an armed man.”  Proverbs 24, v. 33-34

Rest obviously has its place.  It is necessary to allow room to grow, but do not get too contented being at rest.  For, comfort leads to complacency and complacency to decay and death.   Challenge yourself to stretch your boundaries – move beyond where you are comfortable and into change and growth.  Personally, spiritually, physically, emotionally, intellectually and in your business, being too comfortable, for too long, can spell disaster.   

We only grow when we embrace change and the discomfort it requires.  This has been a particularly difficult lesson for me to learn.  I, by nature, seek stability and, as a lawyer, I am trained to manage and mitigate risk. To make it worse, in business, as in our personal lives, we are drawn to complacency and find comfort in doing what we did yesterday because we know how to do that.  We know that we are good at that,  and we know that it works- (well, at least we know that it worked  yesterday).  So, if we wish to de-emphasize comfort we must work at it and take intentional action.

The legal profession is particularly guilty of clinging to practices and mindsets which are comfortable.  It is an old fashioned industry which has long languished in comfort. Specifically in the realm of business, lawyers are comfortable with the billable hour model,  they are comfortable helping clients with one specific issue at a time and then closing the file until another issue arises.  They are comfortable  avoiding the discomfort that comes with truly integrating themselves into a client’s business, getting to know their core values and strategic mission so that they can help guide the client in that direction.  They are comfortable putting out fires for the client without seeing the strategic vision for the forest.   

In defense of the business lawyers’ comfort addiction, it must be noted that there has been little incentive to change and to grow.  The clients are also comfortable with the current arrangement.  They are comfortable either having a hugely expensive in-house legal department deal with the legal headaches, or they are comfortable trying to deal with the legal matters themselves using hit-or-miss on-line forms, or they are comfortable only hiring an attorney when there is a crisis and they are comfortable paying the high hourly rate billed in tenth of an hour increments.  They may not be happy with it, it may not be the best solution for their business, but it is the comfortable one.  After all, “that is the way it has always been done.”

Perhaps it is time for lawyers and their business clients to embrace a little discomfort, to consider new models of operation, to look at legal services not as a commodity to be used as the crisis demands but as an integral part of business planning.  Perhaps it is time to integrate legal advice and counseling as a tool that is always with you to help guide you toward your goals and to free you up to focus on growing your business.

At Maughan Law Group  LC we provide out-sourced general counsel services to small / medium sized businesses. Our mission is to provide custom legal advice, counseling and guidance which is integrated with our clients’ strategic business objectives.  This allows them focus on the why behind their decision to go into business for themselves.